After strong drop from first half of August DAX found temporary bottom at 9648 pts and now for two weeks it is moving in range 9,900-10,380 pts. Unfortunately there are no many reasons for optimism right now. Chinese stock after two days of not working opened without strong decisions (Shanghai Composite Index -1,56%, Shanghai B-Share Index +2,16%). Mario Draghi didn’t extended QE program which could be an impulse to grow. In 1.5 week there will be the most important event this month – FED will meet to talk about monetary policy. If there will be first raise of rates it will create high volatility on markets and probably big drops

Death Cross formation on DAX

Crossing 200-sessions and 50-sessions moving averages is called Death Cross formation and it is a signal of drops. This is what happened on Friday on DAX but I don’t pay too much attention to this. The same formation happened on Apple stock in 2010, but it didn’t stopped price to go up from 32% to 133$ in just 5 years.

Unless DAX is moving in consolidation, investing in this index has sense only short temr from band to band. Until exit from marked on the chart consolidation (9,750 – 10,380 pts) it should show direction of further moves.

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