Short

DAX - (massive!) Short; This is a no-brainer!

Updated

Germany decided to systematically destroy their (and the EU's) economy, in a consistent and spectacular fashion. This is a no-brainer!! (I have been shorting this, with everything I've got, for the past week.) The only thing that kept this thing afloat, so far, is the underlying currency (EUR/USD) push-pull. I believe that is now over and full capitulation is at hand.

Where will this mayhem stop? ... Well, it depends on the maximum pain tolerance of the combined German industrial base.
Will they let their government fully destroy their entire economy or will they put a stop to it, at some point? ... Right now, I don't care!
The damage is already done, the only question remaining; Just how bad?

Sell, sell, sell ... and then, Short some more!

Note

The German government (as well as the EU parliament) is currently under the full control of "The Greens" . - Who, like watermelons, are green on the outside and red on the inside. (Like the vice-chair of the German parliament stated in a speech, last week: "Germans do not deserve to have their own cars, or their own houses. ... Think before you set out to drive your car or to buy a house. Why do you really need it? ...)

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"We will take away the dream of the German people to own their own houses or their own cars!" - Katja Diehl; German Parliamentary Advisor and "Mobility Expert & Activist"
de.wikipedia.org/wiki/Katja_Diehl

"The reason for an expedited NATO expansion eastward is the otherwise low tolerance for human casualties in the advanced western democracies.
In the future, these advanced societies, which are capable, will provide the means of war against Russia and the Slavic world, in general, to those East- and Central European countries whose population is less sensitive to large number of body bags, should their sons and daughters return home as likely casualties of a major confrontation between East and West." - George Soros; 1993 Essay
... Exactly 30 years ago.

BTW, "to be German is to be the best at whatever is at hand." (When Nazis were in vogue, Germans lead the way. When Communists appeared on the scene, there weren't more dyed-in-wool Communists than the East-Germans (DDR).
Now, when self-mutilation, "hyper-reality" and "self-genocide" is the order of the day, there shall be no more vigorous practitioners of "The New Order" than Germans, once again!
No wonder they went 0-2 the last two times they fielded their Dream Team". This time around, they are clutch for 0-3, true to form.

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Important!!!
Here is to correct an important omission;
This Trade ONLY works if one is also SHORT the EUR/USD

Here, I've got stopped out with a scratch.

This thing is clearly booking for the 15,000 Euro level!

Here is the Weekly;

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A final look, as it currently stands;

(Here, the DAX is Priced in Euros!)

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DAX - in EUROs;

It's getting there - but not quite, yet! This will be a Short for the ages!
Keep your powder dry.

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LONG, for now.

Trade active

Massive SHORT - and stay short!

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This is reacting nicely. Short, short, then short some more!

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Here is a related Spread;

This spread should rally, for now, before going into a major dive, almost exclusively due to the currency differential (U rally).
The seemingly endless EU capital continuously flowing into US markets will push this up here, one more time, but like all good things, that also must come to an end - basically the EU having gone broke already, in the process.

Trade active

SHORT

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SHORT

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Forget the DAX, other than an excellent Short leg for this spread!

... as the Nikkei is banging on that 30,000 level, once again.

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Despite having said that it is not worth to spend an other minute on this pig (DAX)

... however, it may be interesting to note;
Having looked at the per capita GDP and unit gains in productivity, going back all the way to the German reunification; Germany managed to wipe out ALL the gains it had made in 27 years, in just 19 short months!!
Now, if that is not German "excellence" and devotion to a cause - no matter how suicidal it may be - than I don't know what would qualify as such?! ...
This has got to be the most rapid destruction of an industrial base, at least since the Industrial Revolution! (Would be interesting to find an example that would even come close to this.)

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Talk about an abject, one-sided, all-out capital flight/relocation ...

... this would be it!
The entire German heavy industry is now worth less than the Soviet Union's was, back in 1980 - And that's a fact! Talk about going 0-3 ... Ein echte Scheißfest

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“The fundamental purpose of the North Atlantic Treaty Organization [NATO] which should guide it’s function, as well as to mandate the discharge of all of it’s duties, in reality, is to keep the Germans down and to keep the Russians out! - And that, my fellow patriots, must be the guiding light of any real-politics that must inform this nation in all of it’s future actions for the balance of this century and well into the next one.” - Sen. Ralph Owen Brewster (R-ME); 1949

Those words, spoken by a leading US senator in 1949 promptly following the formation of NATO, have never lost their luster nor did they become hollow in practice. They continue to guide US foreign policy from the moment they were first articulated and for the better part of the past 7+ decades.
The difference now is simply the vigor of implementation and the undeniable clarity of the end-game. “... keeping the Germans down and the Russians out” means exactly just that! Namely, a strong Euro Zone, especially one that is in effect nothing more than a German franchise, is in direct collision with US interests, especially one that is based on close Russian integration for cheap energy and for an endless supply of cheap raw materials.
In short, this is a doubly dangerous combination as far as US economic interests are concerned. - And as such, this could not stand! E.g., it was just a matter of time before the US saw the need to step in and break up this Russo-German kumbaya, once and for all.
When the time came - as it did - Russia, the source of everything that’s cheap and of what Europe could possibly need, combined with the endless, fertile Ukrainian lands (now, all owned by American corporations!) had to be swiftly and permanently cut off from Europe if any hope at all was to remain that this 700 Million strong, additional market for US goods and services between London and the Urals would one day become a rich but permanent US colony.
That day is extremely near when this goal, laid out more than 70 years ago, will be reached; Leaving behind a permanently defenseless, 100% energy- and food-dependent Erope, haplessly reliant on US “goodwill”, from food to energy, from iron ore to lumber.
Germany’s fundamental economic destruction is simply the final mile in this march towards the total, unquestionable US world hegemony and as it stands, there seem to be only a few meager yards left in this dash to the finish. “Mission erfüllt!”
(or … in the words of next official German state language: “Mission accomplished!”)

p.s. As some of the more competent contemporary historians had keenly observed: “The White Man had committed suicide with it’s two World Wars, eventually relegating Europe to decline and finally to irrelevance.”

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An added note;
There are endless, behind the scenes, US-Russian negotiations taking place about the future division of Europe, on every imaginable level - except, of course, for anything "official", even remotely in appearance. Notable exceptions are: Any European country - especially Germany! -, or the Ukraine.
A US senator recently remarked when asked: "When will the interested parties be involved?": "No elephant likes it when a flea whispers in it's ear!"

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At the risk of beleaguering the point;
The demise of the Soviet Union came as a total shock to everyone because it happened not too far past it's zenith and during a politically stable, economically quite manageable environment. (That is what Putin means when he says: "The demise of the Soviet Union was a geopolitical travesty.") E.g., there was no real reason for it to occur, especially at the time when it transpired. (... and without ever putting to use the 3.5 million troops - 800,000 in Eastern Europe -, fully committed to the regime!) Make no mistake about it, the powers to be, including in the United States, have learned quite a bit from such a vivid, real-life example. (What could happen to a super-power once complacency sets in. - Since, at one point the Soviet Union has reached 40% of US GDP while creating a 4:1 superiority vs. NATO, not to mention it's nuclear arsenal. By the time of it's collapse, even their defense spending had already receded from a eye-watering 40% of GDP to a "meager" 17%, making the whole situation rather tenable.) A lot of students of history, no less those in government, took vigorous notes of a situation to be avoided at any cost. That intelligencia, just having graduated from college at the time of the Soviet collapse, are now marking their most meaningful years in government service. For them an undeniable US world hegemony is not just some abstract aspiration but rather, an existential need of the United States - in order to avoid the Soviet example.

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This is just breaking out ...

barely half a way to a minimum move. So, buckle your seatbelt and just ride this like a rented mule!
Japan is springing out of it's slumber with arms and related industry production up +43% YoY and inflation holding steady at 3%. (While Germany, now the laughing stock of 2/3 of the world, is sinking ever deeper into an irreversible decline, well on it's way back to the '70s. - The 1870s that is.) Japan, for the first time, is participating in the largest NATO air defense exercise in Germany and Eastern Europe. The German defense ministry announced that they will send 2 battle ships to the Sea of Japan, later on this year. They surely must jest! If history is any indication, that has got to be right up there with all the other suicidal ideas, every empire in decline mustered up as it's last grasp! (Like the Tzarist fleet, having sent 8 battle ships there in 1904-05 and after sailing 18,000 nautical miles all of them just to be sunk in a matter of hours. :-0 Whether it's Japan then or China in the future, they can absolutely annihilate anything floating virtually instantly, short of something that happens to sail under a US or a Japanese flag! (Japan's navy being the 2nd largest in the world, including the only long-range navy of size beside the US's!)

Trade active

This here is now worth a look;

With that Island Top while, at the same time Longs having more than doubled AND this now trading at a steep premium ... SHORT

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Boom!!

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Everybody and their mama is jumping on this, Long.

So, you know it's going nowhere but Down! (Although, it may correct here, briefly.) Plenty of opportunity to add to those Shorts.

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This spread remains a relentless LONG,

... probably for the balance of our natural life spans. (... especially now, that all European equities combined don't amount to the net value of all the public pissoirs, continued to be deployed there.)

Trade active

As anticipated above, we're getting a slight upward correction here;

... providing an excellent opportunity to add to or newly establish a massive SHORT position, anywhere near here (or just above; GAP) this 16k level!

Trade active

If not Short yet ...

... this is a good place to get SHORT

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This is chugging right along, traveling by-the-numbers. (Including that clear break in the DAX/Gold!) SHORT, of course.

... and this years hands-down champion- our favorite: the Nikkei/DAX spread;

... continues to cast it's shadow on things to come.

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As for a full-cycle view of the DAX;

It is bound to lose -45% of it's value, eerily (but not all that surprisingly) inline with the expected decline in US equities, minus the currency differential. The entire big-picture view of German & US equities pointing to the same outcome with uncanny precision.

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Instead of reciting the by now widely known facts, indicating just how destructive the far left, neo-Marxist leadership (using the term: leadership, very loosely ;-) had been, for the German economy, resulting in an outright, irreversible economic suicide, let the following data point speak for itself;
2023 GDP data shows that the Russian Federation's current growth rate is 10-fold (ten times!) that of Germany's. - Yeah, those sanctions are working out exceptionally well, aren't they?! ... ;-) (BTW, the Russian Federation - Putin - has recently increased the minimum wage and state pensions, making those now 3.5-times (350%) that of their Ukrainian counterpart's pre-war levels.)
In short, the fundamental and the technical picture of the DAX now lives in perfect harmony and it is the contemporary poster boy of a death-march.

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p.s. According to the World Bank, by next year (2024) there will not be an EU country among the world's 10 most developed economies.

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The big-picture (Quarterly) view of the DAX;

Notice especially the abject collapse of GVA (Gross value added corporate earnings) - foreign investments, as of late!
(GVA-f.invest. is a leading indicator for full-cycle nominal values, somewhat similar to the Shiller PE-C but more accurate. It has a similar 1/2-cycle lead, i.e., 5-6 years. It has a 96.8% accuracy, all the way back to 1955.)
The GVA collapse, of course, stands the reason due to the en mass flight of virtually the entire German heavy industrial base, already seeking asylum in the US.

p.s. An added tid-bit; Outbound emigration from Germany (by indigenous Germans) to Hungary and to Brazil are up +1300% & +450% respectively, during the past 18 months. The majority - but not all! - are white, German-born retirees, of whom >80% speak neither Hungarian nor Portuguese and >60% has never visited either country of destination prior to their permanent departure. (It appears that the correct descriptor here is "fleeing" or "escaping", as opposed to "emigration" or "relocation", or similar diminutive niceties. ;-)

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Here is a close-up of the Weekly;

There is a full rotation taking place in US equities and since the DAX lacks the high-tech components of the Nasdaq, money flows will likely to keep this churning close to these levels until the rotation is over. (Usually a couple of weeks.)

… and the Daily

Trade active

With the full rotation in US equities nearing it's end ...

... it's time to line up some optimum Short Entries (Sell Stops) in here, as well. (Levels in the chart.)

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Obhviously ...

... SHORT already.

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Trade active

SHORT

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This completes that widening top;

Confirmation a break at 15200.

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With the Weekly Reversal all but completed ...

... the next downside target is 13,800.

Trade closed: target reached

While having covered our Shorts in the US indexes (NQ, ES) for now

... we will remain Short here, mainly due to sitting on a massive amount of Synthetic Puts (Long Calls, Short Futures), all of which enabled us to lock in close to record profits, already. However, the market having back-filled the Gap 15,800, it's time to take a breather and go FLAT here, for now. (Especially considering it's the cucumber season.) Wait-and-see ...

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Not very complicated.

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Nikkei/DAX
(Still) doesn't get any easier than this. (If one must be long equities, for some strange reasons)

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(SHORT since August,1.)

This is about to continue to rip much (much) lower! Continue to ride it (Short) like a rented mule!

Nemo_Confidat

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