01 Dax Daily Chart

Dax Technical Analysis 27/06/2016

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Good morning traders!

There is no point in debating the Brexit, it’s happened, now we deal with it, but I feel the need to rant. So the next couple of paragraphs are a bit ranty, I can be excused for this rant because I am still angry…

I for one, who voted to remain, have recovered from the terrible decision making of my country and decided to look on the bright side of this horrendous outcome. I have decided to look on the bright side because once Article 50 has been invoked and we’ve withdrawn officially, and when we start having to pay tariffs under WTO rules (because, unlike Norway, who have access to free trade in EU, we won’t agree to free movement of people) perhaps those extra costs and the weaker pound will help finally boost UK inflation. And then when the Bank of England increase interest rates to curb that inflation, and a load of over-leveraged home owners go broke (because they have variable rate mortgages, sold to them by commission hungry mortgage monkeys) house prices will be cheaper again. This pleases me!

I also feel sorry for the poorly educated [hopefully minority] of UK ‘voters who genuinely voted ‘leave’ because of immigration, in fact I would go one further and say that I pity anyone who decided to leave based solely on that. I mean seriously, how could my country have spawned people with an unprecedented level of blatant ignorance and lack of basic intelligence to search for facts, so my message to those select few would be to stop reading the Sun newspaper and go and read an actual book. Seriously, read a book guys, because if you don’t and this becomes acceptable, then our next generation is doomed. Then there are the ridiculous stories about the deprived areas of UK, such as Ebbw Vale for example, which is an area showered with EU funding, and they’ve decided to leave because “they wanted a change”. Well done guys! Great decision! Best of luck with that, you got what you wanted, don’t complain and moan when you can’t find a way to plug the hole in your budgets. Anyway…

Rant over, for now.

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Back to business. In terms of technical analysis, I don’t see much benefit in discussing levels today, because Friday was crazy and has distorted everything, so I will get back to normal analysis for Tuesday. It’s safe to say that I am heavily bearish and looking for selling opportunities.

If there is one thing financial markets do not like, it is uncertainty. And we have plenty of this right now. Markets seem to have priced is a ‘remain’ vote and the resulting ‘leave’ vote has caused panic selling of the sterling. I read that in 1992, during Black Wednesday, Sterling dropped around 4% but then continued on to lose a further 20% over the following months. On Friday we lost nearly double that value, so what next? Trillions of dollars were wiped off of stock markets, but of all of the those affect, the FTSE was not the worst off. Perhaps because of the calming comments from our friendly Canadian Bank of England governor suggesting his team have got around 250 billion quid to inject into the market to prop up the pound (partly scares me to sell the pound, but it’s the obvious trade right now). So what does that mean for the Dax? Well it means we are going to have volatility, so scalpers are either going to go bust very quickly, or make a lot of money.

We had the single largest movement on the Dax on Friday, be careful of a minor recovery bounce. But I am bearish.

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1 thought on “Dax Technical Analysis 27/06/2016

  1. The “EU project” don´t let the democratic political process of alternation to happen (don´t let the No by a referendum to be implemented as for France, or twice for Netherlands in the past or Greece lately). The Project Fear of the EU can´t scare the people anymore. Your ancestors saved us from the victory of a socialist corporate fascism. They took the right decision again. I thank the Britons as my grandparents did in Vaucelles/Normandie helping all these young guys who came to give them back their freedom. The German was occupying their house and they had to serve them.
    Greetings from Mickette, French, mid-50, living in Germany with academic education (Magister Artium)

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