- The German index has been all over the place during the trading session on Thursday, which makes quite a bit of sense.
- All one has to do is look at the German bond markets or even the euro to understand that maybe just maybe things are a little overdone in the European Union.
- With that being said, keep in mind that there are a lot of questions about the explosion in spending.
Germany is going to do basically they’re going to go full tilt Federal Reserve quantitative easing, it seems, and they’re going to supply the world with a lot of German bonds that the yield obviously will spike. So, the question then becomes, do you want a determined yield that’s something that you can count on, or do you want to gamble in the stock index? And I think that’s what a lot of people are looking at here. There was the initial push higher thinking that perhaps by pushing the Ukrainian war a little bit longer, you would get a little bit of economic output.
Ultimately
But at the end of the day, that doesn’t look likely. So, although DAX is still very bullish and I am still very bullish about it, I suspect that a short-term pullback makes the most sense here. And we will in fact probably see a pullback towards the 23,000 euros level, maybe even the 22,500 euros level. That should offer value that people are willing to take advantage of. In fact, I’m looking for a pullback and a bounce in the shape of a V somewhere between here and 22,000. I’ll take it wherever I get it and just simply follow the overall trend.
But when you look at the DAX, since Christmas time, we’ve basically been straight up in the air about 3,200 euro. So, it’s probably due to a little bit of grind and back and forth type of action. Doesn’t mean that it’s going to fall apart. It just means that you should be able to buy the DAX at a better price.
Ready to trade our stock market forecast and analysis? Here are the best CFD stocks brokers to choose from.