Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

It’s Not Time to Sell the German DAX

Stock-Markets / Stock Markets 2015 Oct 22, 2015 - 06:06 PM GMT

By: Sol_Palha

Stock-Markets He who trims himself to suit everyone will soon whittle himself away. - Raymond Hull

Again, the talking heads are claiming that there is a pattern that overtly implies that the Dow tends to follow the DAX.  When the markets were free or had some elements of freedom in them, one could give some credence to these patterns, but today where fraud and manipulation are the order of the day.......  Such patterns have to be taken with a jar of salt.  By maintaining an ultra-low interest environment for an unusually lengthy period of time, the Fed has fostered an environment that rewards speculators and destroys savers. Nothing could be more insane, but this is the predicament most people find themselves facing today.

The only pattern that matters today is whether the Fed stops manipulating the markets or not. So for now it could be quite dangerous to base major decisions on patterns only.  Furthermore, if Peter thinks, debt is good, then there is a strong chance that Paul will follow suit. Central bankers in  Europe and the U.S. and a host of other nations have created the environment that promotes speculation; the era of easy money is not going to come to an end in the near future.

Do not follow the crowd or popular experts, for other than telling a good tale, their so-called expert advice is best left for the fishes. Thus, we feel that the DAX like the Dow is paving the way for a much stronger move up, after a test of the current lows.  

What’s next for the DAX

If the DAX closes below 9,000 on a weekly basis, it should quickly dip to the 8400-8500 ranges.  We should note though that the odds of this coming to pass are rather low.  The more likely scenario is a test of the recent lows. If the DAX happens to trade down to the 8400-8500 ranges; do not give into fear and recognize it for the opportunity it really is.  Buy with gusto.

Long term: a monthly close above the 12350-12400 ranges, will set the path for a series of new highs. Our trend indicator is dangerously close to turning positive, we suspect it will do so when the DAX pulls back and test its recent lows. One easy way to play the DAX is via the ETF DAX. Those seeking more leverage can use futures or purchase calls on DAX.  Long term: a monthly close above the 12350-12400 ranges, will set the path for a series of new highs. Our trend indicator is dangerously close to turning positive, we suspect it will do so when the DAX pulls back and test its recent lows. One easy way to play the DAX is via the ETF DAX. Those seeking more leverage can use futures or purchase calls on DAX. 

Strategy for the DAX

The DAX is currently running into a zone of resistance; the moment it closes below 10,000, the path for a test of the 9500 ranges will be set in motion. Until that point, it has a chance of trading all the way to the 10,500 ranges before pulling back. We would view all strong pullbacks as buying  opportunities.  Wait for a pullback before jumping in.

For those of you looking to buy german stocks, the following five candidates might make sense.

SAP and FMS are the strongest, followed by DB, then ADDYY and finally AIXG, which is the most speculative play.

People who want the most approval get the least and people who need approval the least get the most. Wayne Dyer

by Sol Palha

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of the market. He and his partners are on the web at

© 2015 Copyright Sol Palha- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in