I think that the target is too far away. I agree with the fact that markets look very topy, but if I will see Dax at 8500, I will be happy to start taking profits. I don't have a position on the Dax due to contract size and commisions, but I have a position in Allianz AG which is highly correlated, and it's a perfect proxy. Keep in mind that no matter what the FED says tonight, Mr. Draghi is likely to announce QE in the next few months, probably in January. As it always happens, some smart people will know about this before it actually happens, and considering that the holiday season is coming now, I find it hard to believe that the Dax can fall that much in a couple of weeks. Anyway, I hope it goes where you say it might, and we'll both be two happy traders.
YaKa
⋅
Vlad,
you may be right.
however: 6month is a hell of a lot of time. Draghi, the magician, has managed to stabilise markets with words since July12.... Super smart.
1 The news of the QE is there, digested and over anticipated.
2 I am not convinced a QE would work and so is the market apparently (look at japan failed start)
3 I am not even sure he will deliver (Deposit rate being negative, it is not certain banks would participate) + rates already low anyway, what's the point...
I actually think a good correction here would be beneficial for the real economy as Yellen/Draghi could push more intervention to support the real economy and the market at the same time...
vlad.adrian
⋅
I am not fundamental analyst, but a fundamentalist I follow expects Draghi to deliver in January, that is why I said that there is not enough time. Obviously 6 months would be an awful lot.
Regarding QE working or not, it's not about the long term, because in the heat of the moment, you will have a surge in stock markets, just like the one in Japan, and I personally want to be long during that surge, if I can. Hopefully, Yellen will trash the markets tonight with a hawkish speech and that should stir up some risk aversion
YaKa
⋅
ok, makes sense.
Note though: Japan QE was surprise and the market was in bull posture. Here draghi may disappoint, be it just on the wording and the market could fall. over priced, over anticipated, hope is high... so can be disappointment in the price action.
I dont know, let's see and trade the days as they come.
vlad.adrian
⋅
Yes, totally agree with that. That was one of the rare cases when fundamentals preceded technicals. I am a firm believer that technicals precede fundamentals almost all the time.
charlie.delta.trader
⋅
Mickette
⋅
From the EW perspective + intact Bull Market trend it makes sense.
YaKa
⋅
My view: the psychology is about to change. We are entering a space where intervention will be followed by failure. Like in 2008 when Hank Paulson was trying hard.
Mickette
⋅
One thing to think about... ongoing capital flight from all the EMs weak currencies. Bubble in Bonds + Stocks. Russia is the present new "shock wave". Am I wrong on this?