It is the many positive company figures – including those from Allianz, Infineon and Eon – that keep the Dax above the 16,000 point mark. At six o’clock in the morning, the indicative prices signaled a slide below this psychologically important mark.
Interesting: The slide below the mark of 16,000 points to the daily low of 15,987 points lasted only a few minutes and was the signal for many investors to enter. As a result, this area is increasingly becoming an important short-term support.
A look at the Dax chart is also gratifying: because the upward trend on a weekly basis remains intact. Since the beginning of October, the leading German index has reached a new high and a higher low every week.
This trend would continue this week if the Dax stayed above 15,760 points. If so, it should be exciting in the coming week. In order to continue this trend, the stock market barometer would have to rise above the current record high of 16,104 points.
Investors should currently keep an eye on the so-called nerve barometer, the VDax. This index rises slightly and thus signals that futures market professionals expect higher fluctuations in the Dax in the coming days. However, a direction cannot be read from this data.
Big institutional investors get nervous
The VDax is listed at 17 percent. With a score of 16,000, the professionals expect the German leading index to fluctuate between 16,780 and 15,220 points in the next 30 days.
The absolute height of the VDax is currently not worrying, rather the tendency that the nerve barometer is rising despite new record highs. The US volatility indices of the S&P 500 and Nasdaq 100 are also higher than they have been in four weeks, despite many new record highs.
For Thomas Altmann from the investment house QC Partners “this shows an increasing skepticism of the big institutional investors towards the current rally and the high price level”. For him, “rising volatilities with rising or stagnating prices in the past have often been a reliable warning signal”.
Looking back, you can read that on the VDax. The index rose to 25.17 percent on September 20. In retrospect, it was the harbinger of the price slide on October 6 to 14,818 points.
Inflation data could shake up the bond market
Another issue is inflation. In the afternoon (2:30 p.m.) the US Department of Labor announces the inflation rate for October. Economists expect an increase on the same month last year to 5.8 percent. That would be the biggest price hike in 30 years. In September the value was 5.4.
For the stock exchanges, it could be decisive which number is in front of the comma. The stockbrokers have already got used to the five. Altmann predicts that a six definitely has the potential to cause new distortions in the bond market. Because the data from China show that the inflation is not over yet. At an annual rate of 13.5 percent, producer prices in the Middle Kingdom are rising as sharply as they were in 1995.
However, there is still no sign of a higher inflation rate on the bond market. Because higher price increases are likely to put the central banks under pressure to raise interest rates more quickly.
The yield on a ten-year US government bond is currently 1.472 percent and thus still well below the level in mid-October, when the value was 1.70 percent. The ten-year federal bond has also slipped again to minus 0.297 percent.
Look at the individual values
Alliance: After strong quarterly figures, the share rose 0.4 percent. “The numbers for the third quarter were above expectations, driven by all business areas,” said a trader. Above all, the growth in asset management is “impressive”. For the year as a whole, the insurer is heading towards record operating results.
Continental: Delivery bottlenecks and rising raw material costs will also leave their mark on the automotive supplier’s balance sheet in the coming year. Although there are signs of easing in the coming months, the shortage of semiconductors and higher raw material prices would continue to burden the automotive industry. However, the share is still up 0.8 percent.
Infineon: The chip boom will continue to drive the company in the new fiscal year that has just begun. The Dax group from Munich has not been so profitable for a long time. The share initially led the Dax winners list with a plus of around two percent, but is now 1.5 percent in the red.
Adidas: The papers got the receipt from investors for a more pessimistic outlook and a quarter below expectations: the shares fell by up to 6.9 percent to a three-week low of 275.20 euros. The forecast change does not come as a surprise in view of existing supply chain problems and weakening growth in China, judged the analysts from Credit Suisse. Now it is a question of the extent to which the problems will be reflected in 2022.
SMA Solar: In the SDax, the shares soared with a plus of almost 15 percent to the top of the small cap index. Missing components slow down the solar technology group if the order situation is good. Despite a slight decline in sales in the first nine months, the inverter specialist earned significantly more than a year ago.
Veganz: The IPO of the vegan food manufacturer is disappointing. The first price was EUR 86.90, after which the shares fell to EUR 83.50. Compared to the issue price of 87 euros, this means a discount of around four percent.
What the Dax chart technology says
On the bottom, there are two upside gaps (technical jargon gap) in focus. These occur when the lowest point of the trading day is above the highest point of the previous day. However, if they remain open, new record highs are likely to follow.
The first gap on November 4th is between 15,998 and 15,973 points, which was partially but not completely closed on Wednesday. If this gap is closed completely, there is a risk that the Dax will fall back into the multi-month sideways range between 16,000 points on the top and 14,800 points on the bottom.
The second gap is at 15,760 and 15,690 points. Falling below this mark in the coming days should call the year-end rally into question.
On the upside, the previous record high of 16,104 counters is likely to be just a transit point on the way to 16,200 digits. From the month-long sideways phase between 16,000 points and 14,800 points, another target price of 17,200 points can be derived in the longer term. According to the chart technique, this trading range, i.e. 1200 meters, is a measure of possible price gains.
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