Again, that was an interesting week on the German stock market. The DAX lost 1.04% compared with the week before. Is this an indicator for a correction in general to come or is it the result of certain unrelated events like the disaster of ThyssenKrupp or Siemens not able to achieve the goals 18 months down the road?
The DAX developed not a sell signal last week. The index is just half way through his still positive trend channel. But first indicators show the strength of the trend is getting weak.
Other stock markets delivered last week a clear signal. DOW, S&P100, S&P500 were giving us a clear sell signal on Friday. But NASDAQ developed earlier last week a sell signal and were able to recover. In UK the FTSE developed on Thursday a sell signal and so did in Japan's Nikkei 225 already on Friday 19th.
We can see on major markets a correction started and therefor it is highly possible same will happen in Germany. As a support of this assumption the Short DAX developed a buy signal on Friday. It is time to go short in Germany specially for stocks who are out of their channel, overpriced and ready for a correction like Daimler and Continental.
During July I always supported Volkswagen. Since July 7th Volkswagen achieved 9.11% increase compared with DAX 5.62%. I also mentioned BMW, 11.61%, Heidelberger Cement, 10.66% and Lanxess with 8.51%. No one of them developed so far a sell indicator last week and it might continue. But if the DAX will develop a sell signal next week and a correction will start it might be better to cash in.
But as always: Just my 5 cents....
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