The German index rallied during the Friday session, as we continue to see a lot of sideways action at this point.
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The German index rallied during the trading session on Friday as we go into the weekend with rates drifting a little bit lower, not only in Germany, but in general.
That being said, as we head into the weekend, it's going to be very difficult to guess what Donald Trump or the Iranian regime decides to do over the weekend, and that will have a major influence on oil and the flow of oil. This in turn has a major influence on what could end up happening with German stocks and the German economy, as there are a lot of industrial companies out there that will be greatly influenced by this. The volatility, I think, continues. The choppiness, I believe, continues as well, and that does make sense in a time of uncertainty.
German Fiscal Policy and Exporters Provide Underlying Support
But one of the things that's really helping the DAX longer-term, at least in my opinion, is going to be the fact that the German government is going to stimulate the economy. They are becoming a lot looser with their fiscal policy, and we've seen what that does in other countries around the world. Germany is typically very stingy with its budget, but that is starting to change, and that should help a lot of the bigger industrial companies, exporters, and the like.
Speaking of exporters, we'll continue to watch the euro. If the euro does slip, that could help the DAX as well, as it makes German goods cheaper for big customers, especially in the United States. Ultimately, we are dancing around the 50-day EMA. We're still consolidating in the same area we have been in for 3 weeks. So, while I do think that we have a lot of support here, and there is some bullish pressure, the reality is nothing has really changed since we had a major sell-off back in the beginning part of July.