The previous low of the current correction, since the record high of 14,169 points on Monday last week, is 13,830 points. This area was practically retested with yesterday’s low of 13,853 meters. The area would be the next point of contact for weaker courses.
So far, the correction has not been very pronounced – the maximum minus is only 2.4 percent. At values of minus ten percent, one would speak of a significant correction, while values of minus 20 percent would be considered a bear market.
Will the small expiry day bring new momentum to trading on Friday? On such a trading day, options on indices and individual stocks expire. In many cases, prices fluctuate above average in the days before, because investors want to move the prices of the securities on which they hold derivatives in a direction that is favorable for them.
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So far there is not much of it to be seen. The reason why the fluctuations have remained small so far is also related to the current positioning of investors on the futures market. On the one hand, the sum of the open call and put options is rather small compared to some previous small expiry days.
On the other hand, the Dax is currently quoted in the range that a majority of futures market players would like for a settlement rate: between 14,100 and 13,900 points. This small decay has significantly less influence on the overall market than the Witches’ Sabbath, the big day of decay every three months.
Gold price before the decision
Much has been written about a commodity rally, but none of this is seen in the gold price. The price has fallen six days in a row and is also quoted today, Friday, 0.3 percent in the red at 1777 dollars per troy ounce (31 grams).
The ongoing euphoria on the stock markets, rising US yields and a stronger US dollar meanwhile even pushed the gold price below the November low of 1760 dollars yesterday. The US Treasury bond yield remains another drag on Friday. The value with such a bond with a term of ten years is 1.30 percent.
If the price of the yellow precious metal does not quickly cross the mark of $ 1,800 again, according to technical analysis there is a risk of a slide towards $ 1,400, perhaps with a longer stop at around $ 1,520. The $ 1,400 mark is very important because the gold price has tried in vain for almost four years to overcome this resistance at the time and has turned it down again several times.
According to Commerzbank commodity analyst Eugen Weinberg, the main reason for the price slide is the rather weak investor demand, although the positioning of large investors in the gold market has been historically more pessimistic since late summer.
The gold ETFs, which have to sell the yellow precious metal due to the physical deposit, also recorded another outflow of almost seven tons last Wednesday. Their total stocks have now fallen to their lowest level since July.
In Weinberg Gold’s opinion, gold can hardly withstand this triple headwind from economic optimism and therefore lower risk perception, rising interest rates and a somewhat stronger US dollar, so the price is likely to remain under pressure for the time being.
“But in the medium to long term, gold will become even more attractive as a tangible asset and an inflation-proof investment,” says the Commerzbank expert. Because the real interest rates worldwide, which are decisive for the gold price, should remain low or even negative because of the higher inflation on the one hand and the massive bond purchases by the central banks on the other.
Look at the individual values
Allianz: A surprisingly strong full year result lifts the shares to the top of the Dax. The insurer’s shares gain around 1.8 percent. The shareholders also enjoy the stable dividend of EUR 9.60 per share.
Varta: The price losses in the paper continue. The battery manufacturer’s shares fall by a further 1.9 percent to 131.60 euros. A disappointing outlook brought the stock one of the biggest daily losses in the company’s history on Thursday, despite the fact that the company announced that it would pay a dividend again.
In the turmoil in the market for speculative small investors and hedge funds, the Varta share rose to a new record high of EUR 181.30 at the end of January. During this phase, shortsellers had canceled their bets and bought back the shares, causing the price to soar.
Bitcoin and ether soaring continues
The soaring of Ethereum, also known as Ether, continues. The second most important cyber currency after Bitcoin rose on the Bitstamp exchange on Friday by 0.7 percent to a record high of $ 1951.93. Meanwhile, Bitcoin remains in close contact with its latest record at $ 51,565 after Tesla boss Elon Musk announced on Twitter that in times of negative real interest rates, the cryptocurrency is the better choice compared to euros, dollars and the like.
What the Dax chart technology says
The German benchmark index hangs between two price gaps: Last Wednesday, a small downward price gap was torn compared to the quotations on Tuesday, between 14,050 points and 14,036 meters there was no quotation during regular trading hours. This gap is now considered the first resistance if the Dax should rise again above the 14,000 point mark.
On the downside, the upside gap from late January is still intact. Such upward price gaps arise when the highest level on one trading day is below the lowest level on the following day. The reverse applies to downward price gaps.
This upward price gap in numbers: on Monday of last week, the highest Dax price was 13,648 points, the lowest price on Tuesday of last week was 13,693 points.
The support, which is even more important from a chart technical point of view, is just below that with 13,500 meters. This mark formed a resistance for months last year that was not overcome until December. That is why the resistance has turned into support. The leading index only fell below this once at the close of trading this year.