DAX Breaking Down, Up Fractionally YTD…..The Only Other Equity Market (to ours) Still in the Green In the Developed World

by Dan August 1, 2011 12:25 pm • Commentary

This morning I identified the DAX’s performance into the close as a good “tell” for our markets…..well, not only did the German Index give back all of the gains made on the open but closed down through a massive support level and its 200 day moving average.  The 4.3% intra-day peak to trough move has to be one of the largest moves, for the usually stable index, in a a very long time.

1 Day Dax Chart from Bloomberg LP


The chart below demonstrates a fairly ugly technical breakdown and could signal some ugliness to come.


This sort of price action is concerning as Germany’s economy has been a beacon in a fairly ugly storm in Europe throughout the year. Additionally the Euro which traded as high as 1.4454 vs the Dollar this morning has reversed all of those gains and is now trading 1.4217….that is a huge move intra-day for a currency. Remains range bound between 1.45 and 1.40, I think we see a new low below 1.40 in the next week or so.


1 Yr Euro vs Dollar from Bloomberg Lp