By DAX Forecast: Bounces Just in Time – 22 September 2022
This is a situation where I think if you are careful enough, you should find several shorting opportunities.
Stock markets are crashing again
When you look at the European Union, it is an absolute rack just waiting to happen. After all, you have a situation where the war in Ukraine continues to drag on, and that obviously has a lot of negative influence on the market. One of the biggest problems of course is going to be the fact that Germany is going to run out of energy before it’s all said and done at this point. The manufacturing sector is a huge part of German strength, so I do think that you need to pay close attention to any potential manufacturing closings. If they do not have energy, they will not be producing anything.
Furthermore, Germany desperately needs customers, meaning the rest of the European Union needs to get its act together. It is because of this that I think we continue to see a “fade the rally” type of scenario in this market, and this almost certainly favors looking at the 50-Day EMA as a potential ceiling, if we even get to that area. Even if we break above there, the 200-Day EMA is just below the EUR14,000 level, and therefore I think that is your absolute ceiling in the market. It’s not that we break above that area that I think the downtrend is broken, something that is not going to happen anytime soon.
This is a situation where I think if you are careful enough, you should find several shorting opportunities. When we finally break down below the EUR12,400 level, then the market really starts to unwind at that point, perhaps making its way back down to the EUR12,000 level initially. After that, we could be looking at EUR11,500.
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