Stock averages flipping on coronavirus indecision

Intermediate
  • The major global stock averages have been in a very volatile environment over the past 1-2 weeks since the outbreak of the coronavirus.
  • Erratic news flow regarding the virus spreading, alongside mixed message from authorities have caused the all asset classes to flip between “risk on” and “risk off” modes.
  • Also, the US earnings season continues to broadly provide positive signals for the state of the US corporate market.
  • Although global stock indices are still vulnerable into February, for today the risk seems to skewed be higher.
  • Here we focus on the future on German benchmark average, the DAX

DAX day trade outlook: Risks back higher

A Monday rebound for a small base and to ease bear pressures from Friday’s plunge through the key, early January swing low at 12939 (for an intermediate-term bear shift,) to switch risks back to the upside into Tuesday.

  • We see a upside bias for 13126.5; a break above aims for 13207 and 13275, maybe key 13373.5.
  • But below 13050 targets 12985/980; through here opens risk down towards 12958.

DAX intermediate-term outlook

An end of January plunge below 12939 set an intermediate-term bear trend.

Downside threat: We see an intermediate-term bear trend to aim for 12592.5, 12375.5 and 12000.

What changes this? Above 13373.5 sets an intermediate-term bull trend.

4 Hour DAX Future Chart

Dax chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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