March did not start well for global indices. In this piece, we will focus on the DAX, because after the ECB decision on Thursday, this is theoretically the most interesting index at the moment. Easing measures usually bring us a relief rally on stocks. That was not the case with DAX, however. I think that the problem here lies a bit deeper and another round of printing money will not save the global economy.
More and more investors are realising that for years, central banks broke the market with ultra-low rates and unprecedented amounts of QE. It hasn’t worked out too well, has it? I mean for economies, not for stocks, which are considered to be in a big bubble by some traders. Anyway, we have the ECB in full dove mode, but the DAX is not feeling that vibe. I wouldn’t say that we’re bearish here but we’re far from the usual euphoria.
From a technical view, DAX is still safe. We are above the mid-term upwards trend line (black) and above the horizontal support at 11,400 points, which is the most important one for now. As long as the price stays above it, we should see a further upswing. Only the DAX closing the day below those two supports would be a signal to go short, but the chances of that are rather limited.
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