German DAX Could Freefall To 10,000 Or Lower...Will That Affect The SPX?
Candy Matheson | Jul 17, 2022 12:32AM ET
In my post of Mar. 7, I warned of a stong divergence between Germany's DAX with the European MSCI Financials ETF EUFN.
Both have dropped since then, as shown on the following monthly charts.
While the DAX has had difficulty staying above 10,000 since 2015, the EUFN has repeatedly erased all gains above 14.00, which is rock-bottom major support, since its inception in 2010 (a risky investment as it turns out).
The EUR/USD has also dropped back to parity with the US Dollar, as shown on the following monthly chart...a level not seen since 2002. Major support sits around 0.9000.
With major issues currently facing Germany and Italy plus others in France, as well as Holland, Spain, Italy and Poland, it's only a matter of time before we see the DAX retest 10,000, or lower.
We'll see if such a move also drags down the SPX...watch for the level of upcoming Fed rate hikes and subsequent US Dollar moves, especially the EUR/USD pair, for clues.
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Source: ZeroHedge
Source: ZeroHedge
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