Markets

Will the DAX rally hit an all-time high by Christmas? – columns

Do we see a Christmas week in the DAX with all-time high gifts? The index has already approached this mark up to 20 points. While new records were set on Wall Street, we are more cautious in the DAX.

With a return from the lower edge of the range, the DAX already started the last full trading week before Christmas with a swing. He took this momentum straight through Monday into Tuesday, jumping over the top of the range. There were signs of a new attempt in the resistance area of ​​the last few months.

The momentum was enough this time and so the German share index managed to jump over the highs from November and September on Wednesday, which represented the medium-term lid in the chart. It looked like this (chart image from Wednesday evening):

Review of Wednesday's breakout in the DAX Review of Wednesday’s breakout in the DAX

You could therefore look back on the range between 13,010 and 13,300 points with some distance (chart image Thursday morning):

Successful breakout of the DAX range Successful breakout of the DAX range

With a 1.52 percent premium, Wednesday was the busiest trading day of the week. The US Federal Reserve meeting started expectantly in the evening and provided further imagination at the market. The low interest rate level is to be maintained in the medium term and all measures that are conducive to a quick recovery of the US economy, is considering Jerome Powell. He assumed appropriate support from the US government, so that immediately on Wall Street the imagination of the next stimulus package sprang up again.

This also carried the market higher on Thursday and thus closer to the all-time high. On Friday, before the expiry date on the futures market, the so-called Witches’ Sabbath, it was possible to approach the all-time high by up to 20 points. It dates from February 2020 and is trading just below the 13,800 mark.

The end of the week was then slightly negative, but the DAX can be attested to a clear plus in the weekly balance sheet. The chart looks accordingly positive:

Weekly trend was very bullish in the DAX Weekly trend was very bullish in the DAX

Looking at the individual trading days, the Christmas rally can be clearly highlighted again:

DAX trading days in week 51/2020 DAX trading days in week 51/2020

It had increased shortly before the all-time high, which we can take a closer look at in the daily chart:

A close eye on the DAX alone A close eye on the DAX alone

Is this area luring right before Christmas? After all, we still have to “work off” the expiry date, which we saw on Friday as a high-volume event in the capital market.

It is not surprising that the expiry date only resulted in greater volume, but not greater movement. This magic has decreased significantly over the last few years. Market participants usually position themselves in the direction of the event several days in advance.

This was exactly what happened at Tesla. The value is represented as the largest single recording in the history of the S & P500 as of Monday in the broad-market Wall Street stock index and is highly sought after in advance. On Friday itself, the last day of the rebalancing, so to speak, there was again high volatility:

Tesla on Friday Tesla on Friday

Most market participants are likely to have already completed or anticipated this listing.

Back to the DAX – the all-time high is still a determining topic here. On the way there, the index had left several price gaps this week:

DAX week with GAPs DAX week with GAPs

Experience has shown that such course gaps are good trading ideas. But to do this, the market must first generate a corresponding signal.

Is it now “worth” the 20 point gap to the all-time high to continue speculating on rising prices?

Certainly such an all-time high has appeal. This could be underpinned by a quick report on the US stimulus package that the markets have now been waiting for 3 months.

The reports on the rapid vaccinations against Covid19 are also positive. At the weekend, Moderna was waiting for Biontech with a quick approval in the USA. Europe could follow. However, this is not generally similar to the expiry date and Tesla already reflected in the courses?

A consolidation below the all-time high is technically the more charming variant for the DAX. For this purpose, I have the last GAP in view and the former multi-month high at 13,460 points, so that we could run back again:

Consolidation in the DAX Consolidation in the DAX

There are still three trading days before Christmas itself, during which corresponding ideas can be implemented.

I always send my daily market preparation by e-mail before 8 a.m. – please register here.

On Monday there are only two dates on the agenda with the Chicago Fed Activity Index 2:30 p.m. and EU Consumer Confidence 4:00 p.m.

On Tuesday, however, the GDP from England and the Gfk Consumer Confidence from Germany at 8.00 a.m. with further data. This is followed at 2:30 p.m. by personal consumption expenditure and the GDP price index with the actual GDP from the USA.

Most of the dates are on Wednesday, the day before Christmas Eve. 2.30 p.m. the USA not only reports the early initial applications for unemployment benefits, but also the PCE core deflator, capital goods and incoming orders for durable goods. At 4 p.m., the University of Michigan Consumer Confidence from the USA closes the trading week for the most part.

Trading in Germany will be closed from Christmas Eve up to and including Sunday December 27, 2020, including at Lang & Schwarz’s securities dealers.

You will find all the dates for the appointments listed in the following overview:

Economic data for week 52/2020 Economic data for week 52/2020

I wish us every success in retail for the remaining days up to Christmas. Your Andreas Bernstein (Bernecker1977)

Feel free to check out the trading chat for more opinions

or in the Ariva forum for further exchange:

https://www.ariva.de/forum/2020-qv-gdaxi-dj-gold-eurusd-jpy-566939?page=818#bottom

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