The DAX opens today after a couple of days of holiday on account of Easter. We had seen some profit taking in the DAX on Thursday as the traders headed
The DAX opens today after a couple of days of holiday on account of Easter. We had seen some profit taking in the DAX on Thursday as the traders headed towards the long weekend and this resulted in the index falling below 12100 for the day and looking quite weak to close the day. But the good news is that the US stock markets closed near their highs for the day yesterday and this effect is likely to rub off on the major stock markets around the world as they open up today.
We had one of the members from the Trump team yesterday saying that there would be a tax cut in 2017 and this was enough indication for the stock markets to shoot higher and close near their highs in the US. But, on the other hand, it should be a matter of concern to the traders as the stock markets keep moving higher on hope and promises rather than any concrete action. What started off as a tax cut within a few weeks has now become a tax cut within 2017 and even this is not confirmed as yet as Trump and his team are likely to face opposition from their own party. So, for the investors to buy on hope is something that could be dangerous.
But looking at the short term, the effect of such statements can only be positive for the stock markets and so we can safely expect the DAX index to open strong for the day and move higher during the course of the day towards 12200 but it remains to be seen how much it can hold on to its gains. We have not seen any fundamentals or any kind of indication that the market is anywhere close to challenging the all time highs around the 12350 region again and so expect some more consolidation and ranging within the current range.
Looking ahead to today, we do not have any major news from Germany and so expect a strong opening for the day which should be sustained during the course of the day.
Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.