DAX Market Review, December 2018
DAX ended the month in red again and has now declined 4 months in a row. November decline was quite moderate, only -1,4% and the yearly lows of 11000 held again.
DAX ended the month in red again and has now declined 4 months in a row. November decline was quite moderate, only -1,4% and the yearly lows of 11000 held again. It is quite unusual that DAX declines 5 months in a row. Only twice since 1990 has DAX declined 5 months in a row. The last times DAX has declined 4 months in a rown, the decline has though been much stronger. December is this year filled with news and thus the importance of technical analysis is more or less not useful at all; all or any of the events could set off a trend in either direction. From a technical view though, DAX is in a mid term trend decline. 6 month rolling average has crossed below the 12 month rolling average and both are heading south. When this has occured, the following months has been more volatile than usual and sideways move or more decline to be expected. Decmber is usually a bullish month, the bigger picture remains unclear for now.
DAX monthly chart above. First major support at 11000 and first major resistance at 12000. Technically DAX is weak, RSI is making new lows. Note though that in 2012 when RSI was at this level, it marked a long term signicifant bottom.
Long-term resistance levels: 11950/12150, 12850, 13500
On the weekly chart, DAX is progressing in a declining trend. RSI has however now made an positive divergence which has historically been a major bullish factor with a 1-2 month bullish cycle ahead. The downtrend is now much stronger than the previous cycles. There are many important news events on the radar in December, that can change the investor sentiment for better or worse.
Resistance levels: 11650, 11950, 12000
Since 1997
Upcoming weeks have historically been more bullish than bearish
DAX McClellan oscillator has made a positive divergence which is a bullish sign.