As we said last week, there is nothing to invest in Germany. We are glad to see we were right but we did not expect this wild ride.
Whatever the DAX gained this year, it is gone. Last Friday it got even worse and the index went through the famous 9000 points to the South. All the people who are talking since January about the doom day are finally right. Well, as they always say: you have only to say it long enough and it will become true.
It is true that the German economy has apparently some issues. The German Government was forced by US to put some sanctions for Russia in place as we were told a week ago by Vice President Joe Biden. Export to Russia is a big deal for Germany as we can read in an article. The question is were are the specific problems of the German export. One of the main point is the car industry. This industry dropped by 7.9% in August compare with 2013 while July was 8% more then in July 2013.
The big question is were do we go from here. Will the correction continue? Is the doom day coming, is the civilization something from the past? A couple of journalist are thinking about that. Especially those who are talking about this correction since January. We could read the other day in our famous Handelsblatt Online a drop of the DAX to 8,150 points would be possible. They are able to read this possibility out of the chart:
It is certainly possible but we do not understand it. Why not 8,500 points? Or is the correction potential of DAX companies still so high even achieve such an additional drop?
Let us look at a couple of big DAX player.
BASF is already back on a level of early 2013. The same thing happened toVolkswagen :
Others are not back to the level of early 2013 like Siemens or BMW.
But we do not think that every stock of the DAX index will go back to the starting point of 2013. We think we do have soon buying prices again. Who knows if we have to wait another awful week or just a few days. The last week were not done by retail investors like Jo the plumber. This was done by the banksters.
To finalize today: There is as of today no going long in the DAX possible and for going short is possible already too late.
But as always: just my 5 cents........
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