The German DAX today breaks below 13,200 on news that the US president Trump has been impeached in the House of Representatives. This impeachment was perhaps to be expected, however, it is highly unlikely that he will also be impeached in the Senate. So for me, the landscape has not changed significantly yet. The economic landscape will only change if the republican-majority Senate also rules to impeach Trump AND a stronger democratic candidate comes along to challenge the Republicans in an election. This case would point to a longer-term economic impact because they will probably pull the spending and that will drag the market down.
In the webinar this morning, held a little earlier than normal, I talked about the idea of hitting the 13,166 POC (point of control) on futures. This level was tagged a few moments ago, the next target to the downside would be 13,020.
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If the market bounces from the 13,166 POC, then I would expect to see a test of yesterday’s value area low again. If we see bullish momentum, then we have two exposed POCs above us at 13,269 and 13,290 that could be realistic targets.
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