Stocks wobble, correction risks now lower – DAX Forecast

Intermediate
  • A more negative tone for riskier assets over the past 24 hours as markets have reacted to a more sombre tone on the future for the US economy from the Fed (despite committing to likely keeping rates near zero into 2022).
  • The major global stock averages had already dipped lower on Tuesday and the subsequent breakdowns both pre- and post-FOMC on Wednesday and into Thursday have highlighted deeper correction risks for this week.
  • Here we look at the futures contract for the German benchmark share index, the DAX forecast for today and into June.

DAX day trade outlook: Deeper setback threat

A Wednesday selloff before and more significantly after the Fed decision, to send the market down through a key support at 12325.5 this morning, to indicate a more negative phase and to aim to the downside Thursday.

  • We see a downside bias for the bull gap at 12100-082 and then 12000, maybe towards 11848.
  • But above 12390/400 opens risk up to 12455.5 and possibly 12610.

DAX intermediate-term outlook

The late May rally above 11417.5 signalled an intermediate-term shift from a bear trend to a broad, neutral range and the acceleration above the 12275.5 swing peak from early March, sets an intermediate-term bull trend.

  • Upside risks: We see an intermediate-term bull trend and risk for 13824 and 15000.
  • What changes this? Below 10510.5/509.5 shifts the intermediate-term bull trend to neutral; below 10159 to an intermediate-term bear trend.

4 Hour DAX 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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