Dax: Phase 2 in the crash – or new record levels still this year?

Dax rauf oder runter? Bulle oder Bär, wer hat recht?

Last Friday we discussed it. The Dax could not continue its recovery towards the weekend. But then after the weekend we saw bazookas, yesterday only by the german federal government. This also helps the Dax on its way up today. In the bigger picture you can see that the Dax is in a kind of bottom building process. But that is still uncertain. We also discussed on Friday the possibility that the Dax could be about to enter phase 2 of the big crash. Markus Fugmann, as well as globally renowned crash forecasters such as Marc Faber, recently spoke of the scenario that after phase 1 of the crash there is now a phase 2. A sideways trend or a slight rise. This could then be followed by phase 3 in the crash, namely another sharp fall. Is the german stock market perhaps falling to 7,000 or 6,000 points? Who can predict that – nobody. But it is possible.

Dax with rapid v-pattern rising?

But a completely different scenario can also occur with the Dax, Dow and all other stock indices. Because the central banks are now printing money without end (literally, see Fed with unlimited bazooka yesterday Monday). And yes, to mention it again… the German government is now also unpacking its bazooka with government stakes in corporations, unlimited loans, guarantees etc. So the market is flooded. Will this stimuli push up Dax, Dow and Co. in a few weeks, when the coronavirus crisis is possibly over? This scenario is also conceivable, which is completely contrary to the above crash scenario.

Stefan Risse thinks about record highs before the end of this year

We recall here a statement made last week by the merciless optimist Stefan Risse. The (german) video is from Tuesday last week, even before the current bazookas from this week. But exactly on these bazookas he pointed out. If they would come, then this would be the right reaction of central banks and politics. Then the Dax and other indices could rise again extremely quickly. After all, the markets would notice that interest rates are now much lower again, and that stocks are even more without any alternative than before. Stefan Risse even sees the possibility of new record highs on the stock markets this year. His statements are interesting. Who is right, the Risse community or the Faber community?

Dax im Kursverlauf seit Ende Januar
Chart of the Dax on CFD basis since the end of January
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