DAX Index Posts Loss Once Again

The DAX index did what was expected of it as the rebound fizzled over the last 24 hours and the index pushed lower towards the 12500 region once again. We had warned in our forecast yesterday that the rebound that was seen in the markets a couple of days back should not be seen as a recovery as yet.

DAX Lower for the Day

And this turned out to be true as the investors and the traders decided that they would be cautious rather than being gung ho about the index as yet. The uncertainty and the confusion in Italy and Germany continues to show signs of improvement but the traders and the investors do not seem to be convinced of the impact as yet and hence the move higher has been met with some strong selling as those who were caught on the wrong side of the move lower decided to bail out at better prices.

The bottom fishing traders also decided to take profits and this coupled with the continuing uncertainty has led the markets lower and into the 12500 region for a brief while before a recovery towards the end of the day helped the DAX to close above the 12600 region for the day. But the worries are not yet totally gone as yet and it would be interesting to watch the close of the markets for the week.

Looking ahead to the rest of the day, we have the employment data from the US in the form of the NFP data and this could impact the stock indices in the US which could in turn impact the DAX as well. The bulls in the index are clearly on the backfoot with the resistance and the selling coming in the 12800 region and it would take a lot of effort from the bulls to push higher through this region. The traders would be well advised to wait and watch from the sidelines for now.