The DAX Index has reflected global investor sentiment early today as equities react to the US election and its unknown outcome. The German index opened this morning with a sell off which tested lows near the 11850.000 level, but then began to reverse upwards. The value change on the DAX Index has reflected the results of the US futures markets which earlier today indicated a negative opening on the Dow Jones Industrials but now reflects a positive opening.
The DAX Index is surpassing yesterday’s highs which were achieved on solid upwards momentum. Choppy trading conditions should be expected today as investment houses react to developing news regarding the US election. As of this writing, investors may be relying on the assumption that President Trump seems to be leading in a few key remaining states which have not been fully accounted for, but seem to indicate Trump may be approaching a positive statistical margin of error percentage which signals he may be declared the winner. However, that assumption is very debatable and the outcome of the US election may not be officially acknowledged near term.
While the DAX Index has done well this morning and has shown the ability to bounce higher after a nervous opening, speculators should not take anything for granted. Recent US election results have proven tough to predict outcomes within critical states which have a direct effect on the presidential vote, and these difficulties will continue to make financial institutions nervous. If developing news proves dynamic and suggests President Trump could lose his mathematical lead in key states, havoc is likely to ensue on equity indices including the DAX Index.
Technical speculators may believe the German index has been oversold on a vast sea of nervousness which has pervaded the financial markets the past month. Traders may want to bet on clarity emerging and a resumption of bullish momentum to reignite, but that will be a speculative endeavor short term.
Speculators need to be ready for nervous conditions short term and if the US election winner remains undeclared and looks like it will head for federal courts, this could set off an additional wave of nervous sentiment in a dynamic fashion. Speculators who do want to buy the DAX Index should consider being participants with limit orders and look for reversals higher if equities challenge support levels below.
DAX Index Short Term Outlook:
Current Resistance: 12216.000
Current Support: 11970.000
High Target: 12320.000
Low Target: 11855.000
