Russian Crisis Taking Toll on DAX

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By Jacob Maslow

Russian Money Background. Rubles Banknotes And CoinsAfter experiencing a volatile trading session yesterday, the DAX has so far been subject to heavy selling pressure throughout the morning. It can be attributed to the crisis in Russia, which has deepened and the Russian stock markets yesterday was down by  nearly 12 percent. The Russian markets opened up higher this morning but have given up nearly all of their gains, making many believe that the Russian crisis is far from over.

Investors should be aware of today’s upcoming FOMC Minutes Meeting. A number of analysts believe the Federal Reserve will finally take a more hawkish stance and state or at the very least imply that an interest hike is imminent. This can have tremendous ramifications, not only on the DAX, but throughout all of the equity markets throughout the world.

When looking at the hourly chart for the DAX, the index is continuing to experience heavy resistance at the 9592 level, while finding firm support near the 9250 zone. Additionally, it is trading below its daily moving average. Its momentum indicators continue to trade in bearish territory and are showing no signs of reversing, which is of course a negative sign. Lastly its relative strength index is still exhibiting no signs of inherent strength, which is certainly a bearish sign for the short-term.

Actionable Insight:

Short the DAX at current levels for an intermediate target at 9250, with a strict stop-loss above 9600.

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