The DAX (German Stock Index) on the left hand confirms that a short-term low may be in place by having made a TD Combo 13 but in a week 5 count. That limits the 13 to a brief relief rally event which can still make 10%. This is usually is a good magnitude but these days as the volatility tells, it can also go the other way 10% even on a daily basis. The prior wave had a magnitude of 1250 points down and the current one is at 950. Overall similar to US markets, we need another 4 weeks to drop to 5250/300 to get the intermediate low. For now a rally up to 6000 is possible but the trend remains lower for the next weeks. Central banks sitting tight right now watching the outcome, in case they will have to cut rates right away if the outcome of the vote is not positive. In any case, we will see rate cuts soon on top of the bailout package also in Europe.
Friday, October 3, 2008
DAX Index technical outlook - as the crisis reaches Europe
The DAX (German Stock Index) on the left hand confirms that a short-term low may be in place by having made a TD Combo 13 but in a week 5 count. That limits the 13 to a brief relief rally event which can still make 10%. This is usually is a good magnitude but these days as the volatility tells, it can also go the other way 10% even on a daily basis. The prior wave had a magnitude of 1250 points down and the current one is at 950. Overall similar to US markets, we need another 4 weeks to drop to 5250/300 to get the intermediate low. For now a rally up to 6000 is possible but the trend remains lower for the next weeks. Central banks sitting tight right now watching the outcome, in case they will have to cut rates right away if the outcome of the vote is not positive. In any case, we will see rate cuts soon on top of the bailout package also in Europe.
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