DAX, CAC and MIB Forecast – EU Indices Crushed as War and Energy in Focus

DAX Technical Analysis

The DAX has fallen apart during the trading session on Tuesday as we are looking at a severe problem for Europe. Natural gas not coming from Qatar means it has to be imported from the United States, and that means energy just got a lot more expensive for the continent.

DAX, of course, is full of major industrials and the like, so it makes sense that they would take it on the chin. At this point, I suspect that the DAX is probably heading down toward the 23,000-euro level, and the market bouncing from here, I think, offers a little bit of a shorting opportunity on signs of exhaustion if we get that. I don’t see this market turning around until the energy problem gets solved, which certainly won’t get solved in the current environment. So, with that being said I think we now shift to a very bearish attitude in Europe.

CAC Technical Analysis

The French CAC looks absolutely miserable as well. I think it is going to break the 200-day EMA eventually. It might get a little bit of a relief rally, but it now is shifting to more of a negative panic type vibe.

The 8,000-euro level underneath will be an area of interest. It is a large, round, psychologically significant figure, but Paris is going to have the same problems that the Germans do, and therefore, I think it is the same analysis. If it rallies and shows signs of exhaustion, it could be a shorting opportunity.

MIB Technical Analysis

The Italian MIB is staying somewhat resilient near the 46,000 level after gapping lower, but only losing 2% isn’t exactly winning; it’s just stronger than the other two. Ultimately, I think this one will continue to outperform both other indices but I also would be hesitant to start piling into European equities in an environment where they are going to have to pay so much more for energy. With that being the case, I think the world will continue to be more of a risk-off type of place, and that, of course, will have its major influence here as well.

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