DAX Index Daily Fundamental Forecast – February 6, 2018

It has been a huge sell off in the stock markets all around the globe and the DAX index has not been an exception. We have seen panic in the markets and though the fundamentals continue to remain the same with no major change coming in from any part of the world, the traders do not seem to be too much bothered about that as more and more traders join in on the panic selling and this has only made the situation even worse.

DAX Crashes Lower

The DAX index crashed through the support at around the 12200 region and it trades below the 12000 region as of this writing and there seems to be no respite from the sell off in any part of the world. Over the last couple of weeks, many of the large investors and fund managers had been expressing concern over how high the markets were and that it was a time for a correction and that time seems to have arrived now.

The size of the correction has been on par but the speed with which the correction is happening as the smaller traders sell off under panic is what that should be concerning. What started off as just profit taking from large and small investors, those who had made good profits, gradually snowballed into a large sell off and it remains to be seen how far this would go.

Looking ahead to the rest of the day, there is not much by way of data from the Eurozone or Germany but we should see that the sell off is likely to dominate the market theme for today. We are close to some strong weekly support which should bring in some buying at this point of time but it will take atleast a day or two for the market to settle down and decide the next direction. Till that happens, it would be safe for the traders to wait on the sidelines.