By DAX Forecast: DAX Gives Up Early Gains to Show Weakness
At this point in time you will likely than not going to continue downward pressure, and perhaps make a move toward the EUR12,000 level.
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After all, we would be talking about “market memory” at that point, which obviously has a certain amount of influence. The DAX is going to continue to suffer in general, due to the fact that we have seen so much in the way of destruction in the European Union, as this winter could be a very ugly thing indeed. After all, we have to worry about energy in the EU, and various corporations in Germany are now having to make contingency plans in case energy runs out this winter. This is not a joke; most people are very concerned about the European Union this winter.
Sooner or later, the EU is going to have to come to terms with Russia. There simply is no serious alternative, and Vladimir Putin knows this. I suspect that before it’s all said and done, we will start to see fracturing in the European Union as some companies and countries will do what they can to protect themselves. After all, we could see a major breakdown this winter, so suddenly Austrians are much more interested in Austria and not so much in Belgium, as an example.
Looking at this chart, the EUR12,500 level will be difficult to break above, and I think at this point in time you will likely than not going to continue downward pressure, and perhaps make a move toward the EUR12,000 level. I recognize that the EUR12,000 level is simply a psychological number, and at this point I don’t see the real reason why it would be the “absolute bottom” in this market. Alternatively, every time we rally, I would be looking for exhaustion to start shorting again. I have absolutely no interest in trying to get cute by buying German stocks or indices.
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