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DAX Begins to Consolidate
Traders will be patient today (most likely) and remain hesitant as we struggle to break 9,500 points with any momentum. I have put the key levels and daily signal up on the member’s site (in the analysis section). The massive volatility days seem to be slower, despite the belief of many traders that we are due one more ‘flush’ in the market. Probably another 10% day at some point, just to really hurt those early bullish traders and make them feel that pain. I know it sounds sadistic, but that’s how the market works, just as it looks like the market is about to collapse, it has a ‘tear-your-face-off’ rally. Right now, the DAX begins to consolidate.
Investors are stuck between hopes that government and central bank action will suffice and fear that the pandemic will continue to spread rapidly, threatening one of the worst recessions in recent history. A recession will happen almost certainly in Q3 and Q4, in my opinion.
The value area high is currently 9612 and the value area low is currently 9496. Watch out for the previous session Point of Control (POC) at 9566. For more key levels, visit the member site.
COVID-19
Four months after the outbreak of the Covid 19 pandemic, more than a million people worldwide are now infected with the life-threatening virus. It is still unclear when public life will at least gradually return to normal. Uncertainty is forcing more and more companies to cut their annual forecasts.
NFP & Oil
Today’s NFP number is was compiled before the US economy was hit with covid-19. Yesterday’s jobless claim gives a better picture of the massive rise in US unemployment and points to a huge April non-farm payroll release. Apparently Trump had ‘forced’ Russia and Saudi Arabia back to the negotiating table regarding oil. Look out for details on what a potential deal in terms of cuts to oil production between the different sides could look like.
China
There are some bullish signs, especially in China. Truck and bus manufacturer Traton said “there are already orders for Scania trucks in China, which we cannot serve at the moment because we had to temporarily stop production.” So maybe they are starting to turn a corner and perhaps we will do the same.
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