Risk appetite has shown optimistic signs early this morning and the DAX Index is flirting with highs as the trading days begins.
The DAX Index opened with positive momentum this morning taking advantage of recent climbs that have brought the 13000.00 value target back into view for speculators. After hitting highs of nearly 129650.00 yesterday and early today, some selling has emerged on the German index, but trading has not been violent and investors are obviously keeping their eyes on the US future markets which are indicating optimism is lurking and may create gains today. So short term selling is likely a natural cycle within the current market place which can be used as an opportunity to take advantage of pull backs if a trader thinks the market is going to move higher eventually.
September was not a kind month for speculators who were simply trying to pursue the mid-term upwards trend in equity indices and wagering on new positions. Timing market entry is a critical piece to the investor puzzle and traders who tried to climb aboard a trend they presumed could only go upwards in early September are likely licking their wounds after losing money. Market momentum failed to materialize in many respects and indices stayed choppy and unimpressive most of September.
However, short term speculators have the ability to take advantage of quick trends and capitalize on sudden reversals in sentiment. Risk appetite appears steady this morning and although there are no sure bets in the equity markets as US elections approach in November, speculators may be willing to venture a buying position of the DAX Index and expect positive momentum near term.
Equity markets are frequently motivated by the results coming from the US and this has been quite evident the past week. After President Trump confirmed he was infected by coronavirus equity markets quickly tumbled on Friday, but they regained their composure when better than expected jobs data was published later that day from the US which help create solid investor sentiment. Early this week equity markets have seen mixed results, but technically the markets are maintaining ranges near short-term highs and not experiencing massive sell-offs, which may signal another leg up for the equity indices could develop.
Buying the DAX Index on pullbacks within the 12890.00 to 12880.00 may prove worthwhile. Impatient speculators who believe they should get take positions with market orders cannot be faulted, but if they do this they should also be using their risk management skills wisely to protect themselves against unexpected dynamics that could suddenly emerge. However, global risk appetite does appear adequate early today and this could lead to a test of highs for the DAX Index.
DAX Index Short Term Outlook:
Current Resistance: 12960.000
Current Support: 12860.000
High Target: 13000.000
Low Target: 12810.000