The DAX in Germany fell on Monday, only to turn things around and show life again.
DAX
The DAX in Germany has fallen a bit during early trading on Monday to pierce the 50-day EMA in reaction to headlines coming out of the Middle East with more conflict between the Americans and the Iranians.
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That being said, since then, we've seen a reversal and the market finds itself above the 25,000 euro level again, printing a green candle into the New York session. The 25,200 level has been resistance recently, and if buyers can overcome that, it could send this market to much higher levels, perhaps trying to get to the recent highs again if momentum can carry it that far.
Geopolitical Tension and the German Energy Outlook
On a breakdown below the bottom of the candlestick for the session on Monday, then the market will see previous support levels near 24,500 come into question. The German index itself is an index that is expected to lead the rest of the European Union; it is the largest one, and it is the gateway for a lot of money to enter that part of the world. So this, in a sense, can be thought of as a potential indictment of the European Union in general.
Fears, of course, about natural gas supply and energy coming into Germany this winter had been a major concern for the industrial sector in Germany, which is a major part of the DAX. So, we will likely not be watching that area for some type of clarity when it comes to the supply chain.
Qatar recently had a problem with the destruction of its liquefied natural gas processing facilities, but, at least the last time I heard, it was back to about 80% production. So as long as that is left alone, there is a chance that the energy equation gets taken out of the process. The German government has basically thrown away the idea of fiscal responsibility, so that stimulus could end up being good for stocks.
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