The crucial question for the Dax has nothing to do with the Dax

What’s up with the Dax? There is a headline by Mario Draghi, who said in fact yesterday: No matter how much the eurozone economy is buzzing, let’s just continue with our monetary policy. Actually, that is music in the ears of the stock bulls, who now know that the monetary support of the ECB will be preserved for a long time. Although the German leading index responded to the statements Draghi initially upwards with the simultaneous fall of the euro, but when the Wall Street then showed weakness in the further course, it was quickly over with the glory.

With today’s expiration date, however, big effects are not expected any more in this respect – this takes place in advance, because positions are secured before the expiry date. What is now again in the foreground – interrupted only briefly by the meetings of the Fed and the ECB – is precisely the US tax reform (even if the topic one or the other is already hard on the nerves ..).

And that’s ultimately the crucial question: If the US tax reform comes, that would cause very noticeable improvements in the balance sheets of US companies, which is why Wall Street has been celebrating party for months in anticipation of just this tax reform. But if the tax reform or the reduction of corporate taxes is not or only later (the Senate plan provides for the reduction of corporate taxes only from 2019) – then the US shares are massively overvalued. As a rule of thumb, if the tax reform does not come, there should actually be a correction of 10% to 15% in the US indices.

What that means for the Dax, one can imagine or calculate, since the German leading index would certainly not escape the pull of the US markets. A 10% correction would throw the Dax back to about 11,700 points. Let’s take a look at the (X-) Dax:

Sideways shifts in the trading range between 12807/45 and 13200/45 – much more can not be said. As already discussed, the breakout from this range probably comes after today’s decline, so in the next week, when things are likely to be clearer in terms of US tax reform (the vote in the US Senate on it is for December 22nd intended). So, as the Dax currently presents itself, the risk on the downside seems to be higher then chances on the upside, despite the actually very favorable seasonality!

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