Short

Major Negativ Event: Gemany's Carmakers Dragging Down The DAX

Updated

Quote:

"VW, Daimler Stocks Drop on Spiegel Report of Antitrust Collusion

Daimler and Volkswagen informed antitrust regulators about decades of talks among German automakers on auto technology that may have breached cartel rules, Spiegel magazine reported Friday, citing a document submitted by Volkswagen in July 2016 and referencing another from Daimler. Germany’s Federal Cartel Office wasn’t immediately available to comment. Volkswagen, Daimler and BMW declined to comment.

Volkswagen fell as much as 4.8 percent, the steepest intraday drop since Sept. 27, while shares of Daimler, the maker of Mercedes-Benz vehicles, declined as much as 2.9 percent and BMW slid 3.3 percent."

Remark: Germany's carmakers are high weighted in the DAX as a market cap weighted index. Today's drop in VW, Daimler and BWM broke the up trend valid since 2016.

Note

US-Stockmarkets indicating three ways that the uptrend, startet in Februar 2016, short term might end in the next days or weeks and a consolidation pattern might occur after this:

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The chart above is showing technical damage, if ever the anticipated "rising wedge" should be confirmed. Until this pattern is not confirmed any bias should be not more negativ than "neutral".

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Second Issue: Sentiment

The trading idea below (click on this chart to open and read comments) is telling about sentiment. In March 2017 U.S. stockmarkets dropped on very negativ sentiment. Right now the CNN greed & fear Index is showing "extreme greed" - even the number of "75" showing that is still room to the upside left.

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Third issue or indicator: Volatility drop in all global volatility indices indication the final leg to the up side for all major stockmarkets (medium term). This doesn't mean necessarily that the bull market completely is going to be reversed. The uptrend since February 2016 could be replace by a short or medium term countertrend (down) or consolidation pattern (for a while).

Volatility Drop Could Cause Final Blow Off

Note

Just BMW, VW and Daimler cutting today 40 points out of the DAX. Otherwise the Index would rise or could had rise back above the broken trendline.

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FUNDAMENTAL VIEW: HISTORIC VIX NUMBERS UNDER
"10" EXTREMELY RARE
.
QUOTE:
.
Here’s what happened the last time the VIX traded this low
.
The CBOE Volatility Index dropped to its lowest level since December 1993 on Tuesday, and history shows it could mark a tremendous buying opportunity for stocks.

According to Brian Stutland of Equity Armor Investments, the so-called fear index has only closed below the 10 level on 24 trading days in history, with 15 of those days occurring in the last three months. Note, a close below 10 on Tuesday would mark the 25th time in history and 16th occurrence in the last three months.

But while Wall Street weighs whether the low volatility reading could signal a top for the markets, Stutland pointed out that it could actually foreshadow the next leg up in the rally.

"When we see [the VIX] this low, we look at the stock market and it has done fairly well," he explained Tuesday on CNBC's "Futures Now." "When we see the VIX trades below 10, usually in the last couple of times [the market has moved about 2 percent higher one month later]."

He also noted that the last time the VIX saw a prolonged period below 10, in November 2006, the S&P 500 rallied 10 percent six months later, and 5 percent one year later.

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TECHNICAL VIEW

Major up trendline broken, re test failed: Break is confirmed now, more downsidepotential ahead.

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NASDAQ COMP - IMPRESSIVE SELL SIGNAL LIKELY

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TIME TO ACT IMMEDIATELY FOR DAX TRADERS

Quote: Abgasbetrug

Dobrindt verhängt Zulassungsverbot für Porsche Cayenne

Porsche verwendete in seinem SUV-Modell Cayenne eine Betrugssoftware. Verkehrsminister Dobrindt hat nun ein Zulassungsverbot verfügt und damit auf Enthüllungen des SPIEGEL reagiert. 22.000 Fahrzeuge werden zurückgerufen.
Source: m.spiegel.de/auto/aktuell/a-1160034.html
(Translation as soon as available)

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ALL U.S. STOCKMARKETS INDICES DOWNSIDE MOMENTUM EXCELERATES

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Major Negative Event: EU-UK Brexit talks going to failed or end.

UK-EU freedom of movement to end in ‘spring of 2019’ after Brexit, minister says
Free movement of people between the U.K. and the European Union will come to an end in March 2019 after the completion of Brexit, a U.K. minister has said
cnbc.com/2017/07/27/brexit-uk-eu-freedom-of-movement-to-end-in-spring-2019-minister-says.html

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MAJOR RISK FOR THE DAX: CLASS ACTION

Carmakers face up to $20 bln in fines for illegal collusion
Source: ecns.cn/business/2017/07-28/267151.shtml

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ADDITIONAL INFORMATION, BMW:

This is actuall priced in BMW stocks:
Quote: "BMW 'Categorically Rejects' Allegations of Emission Cheating"
Source: thedrive.com/sheetmetal/12779/bmw-categorically-rejects-allegations-of-emission-cheating

NEWS FROM SATURDAY AND SUNDAY (past 24 hours):
Auch BMW soll bei Abgaswerten getrickst haben
Source: welt.de/wirtschaft/article167174450/Auch-BMW-soll-bei-Abgaswerten-getrickst-haben.html

Note

ADDITIONAL INFORMATION:

German ministry rejects calls for modern diesel tax incentives
Stock Markets5 hours ago (Jul 29, 2017 12:25PM ET)
SOURCE: investing.com/news/stock-market-news/german-ministry-rejects-calls-for-modern-diesel-tax-incentives-511999

Note

ADDITIONAL INFORMATION, BWM, developing story:

BMW fully involved in diesel emission scandal

Quote: "PUBLISHED FEW MINUTES AGO:
.
QUOTE:
"Interne Dokumente im Dieselskandal

BMWs Saubermann-Image gerät ins Wanken

Was wusste BMW über Absprachen im Dieselskandal? Interne Dokumente belegen, wie aktiv der Konzern mit Daimler und Audi über eine Dosierstrategie debattierte. Den Münchnern wird sogar eine Führungsrolle zugeschrieben."
SOURCE: m.spiegel.de/wirtschaft/unternehmen/a-1160588.html
REMARK: Same story in English language as soon as available.

Note

BMW now within a few hours only in the spotlight. All major German Newspaper and online sources reporting BWM in the center of Emission Cheating. BWM told until friday "not knowing about to be involved in the Diesel Emission Scandal.

For further information click on both charts below to load new bars and comments.

Germany is heading into the Federal Election on September 24th. No German Lawmaker is going to support any German Carmaker until the election is over. This should drag down likely the DAX further. Momentum could accelerate now.

BWM:

BWM: Emission Scandal Likely To Cut Price Into Half

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FUNDAMENTAL VIEW: BEYOND DIESEL EMISSION SCANDAL

QUOTE: "Audi targets 10 billion euros in cost cuts to fund electric-car push: sources"
SOURCE: investing.com/news/stock-market-news/audi-targets-10-billion-euros-in-cost-cuts-to-fund-electriccar-push-sources-512094

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DJIA, TECHNICAL VIEW:

ALL TIME HIGH BY OPENING GAP. If ever this might be am exhaustion gap than the DJIA could peak today.

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Comment: FUNDAMENTAL VIEW:

1.CUSTOMERS MIGHT RETURN THEIR DIESEL CARS.
2. AT LEAST U.S. INVESTORS WILL START CLASS ACTIONS BASED ON FRAUD IF STOCKMARKET PRICES GOING DOWN ON THIS ISSUE:

This is going to cost billions for all 5 carmakers in Germany:
m.bild.de/news/inland/dieselmotor/ich-habe-angst-dass-ich-meinen-porsche-nicht-mehr-fahren-darf-52709892.bildMobile.html
Source available in German Language only. Follow up in english as soon as available.

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EUROPES BELLWETHER, GERMANY'S DAX 30, TECHNICAL VIEW:

TECHNICAL DAMAGE WIDENS TODAY.

Note

Similar story in English Language:

German carmakers face political reckoning over diesel
uk.reuters.com/article/us-germany-emissions-idUKKBN1AG12U

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Mueller impanels Washington grand jury in Russia probe: Wall Street Journal
investing.com/news/politics-news/mueller-impanels-washington-grand-jury-in-russia-probe-wall-street-journal-514371

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One year into the FBI's Russia investigation, Mueller is on the Trump money trail
edition.cnn.com/2017/08/03/politics/mueller-investigation-russia-trump-one-year-financial-ties/index.html

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Trump's approval rating plunges to new low, poll shows
.
Trump's approval rating is down 7 percentage points from the 40 percent rating he received in a similar survey in late June.
It also stated that American voters say 54 to 26 percent that they are embarrassed rather than proud to have Trump as president.
cnbc.com/2017/08/03/trumps-approval-rating-plunges-to-new-low-poll-shows.html?recirc=taboolainternal

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FUNDAMENTAL VIEW: MAJOR RISK FOR GERMANY'S CARMAKERS
spiegel.de/wirtschaft/unternehmen/autokartell-bafin-prueft-adhoc-fehler-bei-vw-und-daimler-a-1161733.html
.
ENGLISH TRANSLATION as soon as available.

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MARKET VIEW: WEAK CHINA DATA SCREW DOWN STOCKMARKETS

World stocks shrug off slowing China trade growth to hit record
investing.com/news/stock-market-news/asia-stocks-subdued-as-china-trade-disappoints-515628

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VIX:

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SPX

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VSTOXX: Impressive spike

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DERIVATIVES-VIX shorts hit new record
reuters.com/article/derivatives-vix-shorts-hit-new-record-idUSL5N1KU4TR

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DAX: Next targetscould. Be arround 11.800.

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DAX: Daily candle anticipating an intraday reversal.

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FUNDAMENTAL VIEW: DIESEL EMISSION SCANDAL
Emissions scandal is a risk to German economy: ministry
investing.com/news/stock-market-news/emissions-scandal-is-a-risk-to-german-economy-ministry-520457

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U.S. Stokmarkets: Dowsidemomentum accelerates after rising wedge re broken and left to the downside:

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EURUSD could trigger more short term pressure to European Stockmarkets. Momentum could be reversed in a second if ever Donald J. Trump resigns.

Quote: "Washington Continues To Weigh On Markets"

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Click on the chart above to load new bars and read comments about the prior opened long trades on March 27th 2017.

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EURUSD: Major threat for the DAX in the next days and weeks

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Short term sell of likely. EURUSD adding more pressure to the DAX, same time the DJIA showing lower lows and lower highs and additional a grave stone doji on Friday 25th of August trading close.

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Audi chief knew about diesel manipulation up to 9 years before scandal broke
Revelations would confirm that decision to use software to manipulate diesel emission filters went right to the top
irishtimes.com/business/transport-and-tourism/audi-chief-knew-about-diesel-manipulation-up-to-9-years-before-scandal-broke-1.3193084

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Diesel-Fahrverbote «nahezu unausweichlich
bazonline.ch/ausland/europa/DieselFahrverbote-nahezu-unausweichlich/story/24474508

(Update in english language as soon as available)

Note

Developing important story, available in German Language only. Follow up in english as soon as available. Please use translator to get the meaning in the meantime.

Verkehrsministerium plant Hardware-Umrüstung von Diesel-Pkw
m.spiegel.de/auto/aktuell/a-1164599.html

Note

GEOPOLITICS, TRUMP APPROVAL RATES:
Trump setting records for low presidential approval

Plunging into undesirably uncharted territory, Trump is setting records with his dismally low approval ratings

At 34 percent, his current approval rating is worse than former President Barack Obama's ever was

QUOTE: "Trump has defied the trends before. But if history is a guide, his numbers don't bode well. Low approval ratings hamper a president's ability to push an agenda through Congress and make it more likely the president's party will lose seats in Congress in the midterm elections."
Source: cnbc.com/2017/08/26/trump-setting-records-for-low-presidential-approval.html

Note

Quote: "Money flow: Investors pull billions from US stocks in longest outflow streak since 2004"
Source: cnbc.com/2017/08/25/investors-pull-billions-from-us-stocks-in-longest-streak-since-2004.html?recirc=taboolainternal

Remark: Traders should remind the "lock up periode" for stock repurchase programs to start in 3-4 weeks from now. Stock buy backs may prevent right now US stockmarkets from more selling pressure. This is going to change within days by end of september if investors might continue to pull money out of US stockmarkets.

Note

Quote: "The report also pointed out the turn away from U.S. stocks coincided with the late June surge in the euro against the U.S. dollar to its strongest in nearly a year, after comments from European Central Bank President Mario Draghi suggested higher inflation and tighter monetary policy soon in the euro zone.

The euro subsequently climbed to its highest in more than two years in early August, and traded slightly below those levels near $1.186 Friday. Draghi is scheduled to speak later Friday afternoon at an annual meeting of central bankers in Jackson Hole, Wyoming."
Source: Link above

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GEOPOLITICS: Trump vs. Government shutdown vs. "The Wall" vs. Mexico
.
Trump Repeats Making Mexico Pay for Wall as He Seeks Funding
bloomberg.com/news/articles/2017-08-27/trump-recommits-to-make-mexico-pay-for-wall-as-he-seeks-funding
.
Remark: Not really difficult to understand that Trump is trying to deliver his widely promised "wall" - but no one is willing to pay for it. For US stockmarkets and the USD this more or less "funny issue" now is turning serious and negative.

Note

Merkel Opens Door to Diesel Lawsuits as Election Rival Attacks
bloomberg.com/news/articles/2017-08-27/merkel-opens-door-to-diesel-lawsuits-as-election-rival-attacks

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GEOPOLITICS: Trumps vs. "The Wall" vs. "China":

Trump reportedly demands China action: 'I want tariffs. And I want someone to bring me some tariffs'
cnbc.com/2017/08/27/trump-reportedly-demands-china-action-i-want-tariffs-and-i-want-someone-to-bring-me-some-tariffs.html

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European shares hit two-week low as euro surges
investing.com/news/stock-market-news/european-shares-hit-twoweek-low-as-euro-surges-522891

Note

EURUSD: Momentum is to upside, obviously. European stockmarkets might face more downsidemomentum.

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Dow futures open more than 100 points lower after North Korea fires missile over Japan

North Korea fired a missile over Japan, according to local media.
Japanese Prime Minister Shinzo Abe said the ballistic missile passed over the Tohoku region at the northern end of Japan.
Local government urged people living in the area to take refuge in solid buildings or underground shelters, NHK reported.
cnbc.com/2017/08/28/japanese-government-warns-north-korea-missile-headed-toward-northern-japan-report-says.html

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EURUSD crossed 1.20 tonight.

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11.800 almost reached - take profit.

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If you follow this trading idea remind that this downtrend is a countertrend likely or probably until the markets giving us more guidance. Thisfore i would recommend to take profits with a net gain of almost 400 points.

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TRADING: EURUSD showing probably a short term reversal pattern.This could support European Stockmarkets for a few days.

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DAX, technical: Short term sell off. Shor term target at 11.800 almost reached. Intraday reversal likely. In countertrends (down) often 1-3 days with extreme high momentum occur.

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EURUSD (D): Impressive reversal pattern:

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Dow clambers up nearly 70 points, shaking off geopolitical tensions
marketwatch.com/story/dow-futures-stumble-more-than-100-points-as-north-korea-tensions-flare-up-again-2017-08-29?siteid=bigcharts&dist=bigcharts

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EURUSD: Short term reversal pattern should support the DAX

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FUNDAMENTAL VIEW, SENTIMENT Shifts

Moody’s cuts U.S. growth forecast, upgrades euro area
investing.com/news/economy-news/moodys-cuts-us-growth-forecast-upgrades-euro-area-523892

Note

EURUSD, short term reversal pattern looks like to be confirmed today. The DAX should benefit from this next trading day(s). Remind the risks on Friday's nfp's. Any miss could turn arround everything in a second.

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TECHNICAL VIEW: Inverted cup with handel pattern likely.

Remark: Usually i do not discuss short term time frames like this. Anticipating that the ongoing trend is a countertrend (down) i am forced to trade short term moves. Buy and hold strategies in sideways pattern or countertrends are not helpfull.

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Short term trade closed. Short time bias neutral. Mediumterm bias remains short, downsidepotential limited (countertrend).

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Todays candle reminds - so far - reminds to stay cautious:

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Daily pattern in the chart above showing that the latest upmove is based on three negativ red daily candles. The weekly pattern is showing that from now on up to 12.400 a lot of moves and turns are possible. To avoid losses the best strategy might be to stay at the sidelines until markets giving more guidance about the overall market direction.

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SENTIMENT: INVESTING.COM WEEKLY COMIC
.
Weekly Comic: Draghi shoots the Euro higher, which pops the Dax bubble
investing.com/news/economy-news/weekly-comic-draghi-shoots-the-euro-higher-which-pops-the-dax-bubble-524256

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TECHNICAL VIEW, DAX 30

Note

How to trade it? Trading on intraday basis only and waiting for more guidance.

Conflicting Signals:

Probably it is a good idea to listen to the analysis above from IG Markets.

The analyst is mentioning the trendline and i edited the DAX chart to his points:
Chart Snapshot
.
The Chart is showing now that yesterdays intraday reversal, leaving an impressive daily candle wich like a reversal pattern.
From another perspective yesterdays candle is a break of this major downtrendline followed by an impressive reversal wich now could be seen as a succesfull passed re-test.

Yesterday the DAX showed unexpected high momentum to the upside. After today's daily candle markets could leave more guidance that short term momentum is stronger to the upside still.
From another perspective of view yesterdays candle is a break of this major downtrendline followed by an impressive reversal wich now could be seen as a succesfull passed re-test.
Yesterday the DAX showed unexpected high momentum to the upside. After today's daily candle markets could leave more guidance that short term momentum is stronger to the upside still.

REMARK: This is a short term view only. It is much to early to discuss any medium term trend because this trend is not there. What can be discussed right now is any sideways pattern before the markets will break to the up or downside.

Trade closed: stop reached

As in the comments above discussed before:

Downsidemomentum was limited. The DAX left today probably it's descending broadening wedge. If ever confirmed next days short term this would anticipate an short to medium term up move.

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DAX, daily: Descending broadening wedge could be finished. Consolidation could be over.

prnt.sc/ghwbpw

Trade closed: stop reached

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DAX showing strong upside momentum. Same time the EURO as well. This are conflicting signals reminding to be carefull about any new long call for the DAX.

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OPINION

I am really worried about the SPX monthly candle pattern in case the SPX might drop by end of the month 2% lower than today and might close there. Algos all over the world likely to trade the SPX short than in October.

Note

China looks at ending sales of gasoline cars

China's industry ministry is developing a timetable to end production and sale of traditional fuel cars, state media on Sunday cited a Cabinet official as saying.
The reports gave no possible target date, but Beijing is stepping up pressure on automakers to accelerate development of electrics.
cnbc.com/2017/09/10/china-looks-at-ending-sales-of-gasoline-cars.html

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