DAX Index Daily Fundamental Forecast – March 22, 2017

It was a bad day for the stock markets around the world yesterday as the Asian index, the European indexes and the US indexes dropped on fears and greed and also a general risk off mode in the markets as doubts and fears creeped in about the policies of Trump regarding healthcare and other aspects of the economy. As for the DAX, it did start the day well as it creeped above 12100 for a brief while but that was quickly sold into and then began a total rout as the index kept falling for the rest of the day.

DAX Falls Hard

The stock markets may have finally reached the boiling point and by the looks of it, we may not see 12350 in the DAX index anytime soon, which is a pity considering how fast the index was moving towards the end of last year. The index fell hard yesterday and it trades just above 11900 as of this writing. What should concern the bulls even more is the fact that with this drop, the index is now back into the range which it was in, for the first couple of months for this year, and through which it finally broke only a couple of weeks back. Also, the fall in the US stock indexes late yesterday should point to a weak opening for the DAX today.

A combination of the above 2 factors would mean that we are in for some more ranging and consolidation with a bearish bias in the short term. Also, the stock markets finally seem to have run out of the Trump trade and this would mean that we are in for a bearish phase in the stock indexes, something that many have been warning since long. We felt that the DAX would reach 12350 before this phase came about but the bulls do not seem to have the energy or the momentum anymore to push the index towards that target.

Looking ahead to today, we do not have any major news from Germany but we do expect the bearishness to dominate the DAX for today which could carry it towards 11800.