DAX30 - Quick Update
Dear traders,
the majority of the news I can find about the (German) stock market/economy are bad. France overtook the German economy was only one of many headlines...
Hold on a minute. Really?
I think we get fooled to be honest. Why? Well, the first rule you learn as a (investment) banker is bad news = good news and vice versa. Very good example: If the headlines of the newspapers say: Buy Gold (actually was the case two or three years ago) you should get rid of it ASAP. That really is basic psychology: Buying panic because I may miss something (bubble). Prices go through the roof. At some stage more and more investors take their money and therefore the steam out of the market. The prices start to get cheaper ... and cheaper ... and ... Selling Panic!
Buy at the high, sell at the low - and that is why the market rolls.
However, in terms of the DAX30 I think I worked it out - or at least it's a plausible theory:
a) Bad news. What a comeback would it be if the German economy would spark the afterburner? Big surprise really (not).
b) Euro. Looking at the EUR/USD it seems pressure is coming up. We had a few days of sideway dancing now. Usually a sign for a (deciding) move to come up. A down move would fit the DAX and technical scenario.
c) Ichimoku Kinko Hyo. The cloud is a stronghold. Big support.
d) Technical. The price tested and confirmed the lower line of the up-trend TWICE now.
Bottom Line
Seeding 'bad news' to prepare a 'surprising' growth of the German economy is one way to create euphoria. On the other hand I do believe the news are genuine - so no way the German economy will accept the fact the French took over the lead.
I did go short at 11,600 a few days ago and did well for a day or two but the situation has changed again. I really need to be flexible in markets like these so I have closed all short positions with a small profit and opened a long trade.
With this in mind happy trading and godspeed!
Comments welcome
the majority of the news I can find about the (German) stock market/economy are bad. France overtook the German economy was only one of many headlines...
Hold on a minute. Really?
I think we get fooled to be honest. Why? Well, the first rule you learn as a (investment) banker is bad news = good news and vice versa. Very good example: If the headlines of the newspapers say: Buy Gold (actually was the case two or three years ago) you should get rid of it ASAP. That really is basic psychology: Buying panic because I may miss something (bubble). Prices go through the roof. At some stage more and more investors take their money and therefore the steam out of the market. The prices start to get cheaper ... and cheaper ... and ... Selling Panic!
Buy at the high, sell at the low - and that is why the market rolls.
However, in terms of the DAX30 I think I worked it out - or at least it's a plausible theory:
a) Bad news. What a comeback would it be if the German economy would spark the afterburner? Big surprise really (not).
b) Euro. Looking at the EUR/USD it seems pressure is coming up. We had a few days of sideway dancing now. Usually a sign for a (deciding) move to come up. A down move would fit the DAX and technical scenario.
c) Ichimoku Kinko Hyo. The cloud is a stronghold. Big support.
d) Technical. The price tested and confirmed the lower line of the up-trend TWICE now.
Bottom Line
Seeding 'bad news' to prepare a 'surprising' growth of the German economy is one way to create euphoria. On the other hand I do believe the news are genuine - so no way the German economy will accept the fact the French took over the lead.
I did go short at 11,600 a few days ago and did well for a day or two but the situation has changed again. I really need to be flexible in markets like these so I have closed all short positions with a small profit and opened a long trade.
With this in mind happy trading and godspeed!
Comments welcome
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.