The DAX Index this morning has pulled itself out of the lower depths of its recent value slump, but traders should be prepared for further tests which will examine investment fortitude. Make no mistakes regarding market psychology at this moment; investors globally are nervous and trading is taking place within a fragile scope even by large institutional financial houses which choose to participate as the US election approaches.
Speculators who are accustomed to risk should acknowledge that the next few days of trading will see plenty of swift and often volatile values within equity indices. After suffering steep declines last week the DAX Index may be due for a resumption of buying activity, but wagering on additional bullish momentum to develop short term will be speculative. The use of the word "wagering" is not used lightly, because trading equity indices in the near term may be comparable to playing high stakes poker.
Early future calls from US equity indices indicate a positive opening, but the mixed results from the American stock markets last week should also serve as a warning for the potential of price fluctuations to come. Speculators of the Dax Index should be watching global equity indices for clues, but they should also keep an ear on developing news regarding government pronouncements about additional mandates and statistics regarding the second wave of coronavirus on the European continent. Needless to say, the US election which will take place tomorrow will create seismic activity in the financial markets and speculators need to be braced for swift attitude changes to emerge rapidly.
Morning values on the DAX Index are challenging short-term resistance levels, but it must be acknowledged that the trading is taking place within a technical vacuum in which price levels for resistance are being quantified after last week’s violent gap lower. Traders may feel like they are standing in front of a train regarding short-term attempts to wager on the DAX Index, so they may want to use limit orders which try to take advantage of moves they believe are overdone and anticipate reversals. Short-term speculators may believe the DAX Index can be sold if it challenges the 11750.000 juncture with a selling position while looking for a move lower with nearby take profit orders ready to cash in profits.
DAX Index Short Term Outlook:
Current Resistance: 11800.000
Current Support: 11690.000
High Target: 11890.000
Low Target: 11530.000
