The German DAX dropped right off the bat on Thursday, but turned around to show signs of life again as the longer-term trend remains.
DAX
The DAX continues to be noisy as we initially fell during the trading session on Thursday, only to find buyers coming back in to lift it again. Overall, this is a market that remains very difficult and choppy and will more likely than not continue to be one that is keeping one eye on the headlines around the world and the other on interest rates globally.
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Interest rates have been climbing a bit during the session, and this, of course, includes Germany, but overall, this is a market that will probably pay more attention at times to the outcome of the Middle East due to what that could do to energy supply in Germany. The German industrial base is a huge part of the DAX, and that remains one of the biggest questions at this point as to whether or not there will be enough energy in a few months.
DAX is Still Strong Longer-Term
Overall, this is a very bullish market, and with the German government willing to spend quite a bit on infrastructure and, of course, the ramping up of military spending. It does make a certain amount of sense that some of the big heavy hitters in the DAX continue to see a lot of inflows. The question, of course, is whether or not they are going to have the energy to build and construct anything. Well, if they wait and see how this plays out, the inputs for energy rising certainly won't do anybody any favors.
Therefore, I am looking at this through the prism of a bullish market that is hoping it doesn't get bad news. This will remain one of the most important indices that I watch on a daily basis to get a read on Europe overall.
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