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- During the trading session on Friday, the DAX has lost roughly 5%.
- The text, a long standing outperform her in comparison to its American counterparts, has been dealt a rough blow do to the fact that the tariff war is going to perhaps expand, and European leaders seem to be ready to fight it.
- While it does make a certain amount of sense from a nationalistic point of view, Germany will be especially vulnerable, as its biggest moneymaker is the United States, and with the exception of a few auto plants in the United States, this means that Germany finds itself in a situation where Americans may simply choose products that are either domestically the source, or from other countries.
Germany stands to be a huge loser in this situation, especially as they find themselves in a situation where they are trying to source natural gas, but the sellers of natural gas are very limited. While Germany has been buying natural gas from Russia for some time, it looks like that's going away, and now they have to deal with the Americans as the Qatari supply isn't exactly cheap either. In other words, Germany may find that the economy is suddenly going to get very shaky, just as it is exiting a recession.
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This is it, right here, right now. We are trying to stabilize near the 200 Day EMA, and if we do that means that the DAX may save itself. However, just below there we have the €20,000 level, and if we give that up, the DA will find itself plummeting just like we have seen in the United States. Quite frankly, this is a very dangerous market at the moment, and I don't necessarily think that it's one that you want to come in and trying to“catch the falling knife.”
That being said, if we were to turn around and recapture the €21,000 level, you at least have something to think about. At that point in time, you might have a potential recovery, but it is going to be a long fight to the upside, unless of course we get some type of headlines that suggests the tariff war make cool off.
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