An important message to stocks in the states will come from Germany in the next few weeks!

This chart looks at the DAX index from Germany over the past 10-years. For the majority of the past 6-years, the DAX has remained inside of rising channel (1). The 2018 decline saw the DAX hit support where a 1-year counter-trend rally started.

Over the past year, the DAX has created a new falling channel (2). It is now testing the top of this falling channel and the lows of last February at (3).

For most of last year, the DAX created a bearish divergence with the S&P 500 after the January highs.

What the DAX does at (3), should send important clues to what the next big move for stocks in the states will be. If the S&P 500 is to have a chance to test last years highs, odds are good it needs to see the DAX breakout at (3)!!!

Keep a close eye on the DAX in the next few weeks friends.