Looking back at the gyrations of the German Dax index this year shows what a roller coaster it has been. While I shy away from using simple, single-factor models or analyses when it comes to markets, the key line in the sand for the Dax in 2015 has been a closely watched one: the 200-day simple moving average.
With the index once again toying with this moving average, it could well act as a make-or-break line for a year-end rally from a seasonal perspective.
After the European Central Bank-induced rally in the first quarter of 2015, the Dax was higher by nearly 30% on the year. As the prospects of a slowing global economy began to manifest, however, the index began to slide and by the third quarter the index had not only fully erased its entire Q1 rally but had also dipped into the negative by about 4%.
The strong rally seen since early in the fourth quarter has since pushed the Dax back into the green by about 14%. I get dizzy just recapping this price action but the bigger-picture support lines have held…
Read my full analysis HERE