German Dax.. I dont get it...

Trend Fader · Jun 18, 2005

Germany unemployment rate is at 50 year highs... economy is not growing.. massive layoffs... I dont get how the Dax can be hitting multi year highs and outperforming the S&P. The only thing positive going on for the country right now is the weakining Euro... but even when Euro was strong Dax still held up..

Can someone please explain this outperformance.. i dont get it.. what am i missing?

risktaker · Jun 18, 2005

I suspect that, as in real estate, it's not so much the amount of buying as the lack of ''real'' sellers. Where are they going to put the proceeds? Without some *real* bad news catalyst, nobody heads for the door and the non-existent volatility continues or even worsens.

Anseld · Jun 18, 2005

here's a secret: it's not always "fundamentals."

Trend Fader · Jun 18, 2005

Quote from risktaker:

I suspect that, as in real estate, it's not so much the amount of buying as the lack of ''real'' sellers. Where are they going to put the proceeds? Without some *real* bad news catalyst, nobody heads for the door and the non-existent volatility continues or even worsens.

You have flat GDP growth with a negative GDP expected... unemployment highest since WW2... consumer spending is non existent.. investor confidence at 3 year lows.. Dax at 3 year highs.. lol.. just amazing how the dax plows along like a stellar champ.. atleast would make more sense if it was a lagging market... I just dont get it.. fundementals cant explain it??

Trend Fader · Jun 18, 2005

Here is the relative strength chart... as you can see its crushing the US.

http://finance.yahoo.com/q/bc?t=2y&s=^GDAXI&l=on&z=m&q=l&c=&c=^GSPC&c=^IXIC&c=^DJI

heilbronner · Jun 19, 2005

Quote from Trend Fader:

You have flat GDP growth with a negative GDP expected... unemployment highest since WW2... consumer spending is non existent.. investor confidence at 3 year lows.. Dax at 3 year highs.. lol.. just amazing how the dax plows along like a stellar champ.. atleast would make more sense if it was a lagging market... I just dont get it.. fundementals cant explain it??

Dax is driven by political events right now.

just21 · Jun 19, 2005

How high can it go? Is a CDU victory already priced in?

Trend Fader · Jun 19, 2005

Quote from just21:

How high can it go? Is a CDU victory already priced in?

I still dont think that explains this massive outperformace.

no-problem · Jun 19, 2005

I was also wonder and expecting sharp downtrend but who knows.

it is very strong at this moment. We need 2-3 days in red close to get our 200-300 points decline.

nazzdack · Jun 20, 2005

For what it might be worth............there's lots of foreign money flowing into Germany. That buying pressure will continue to lift the DAX, regardless of the "fundamentals". The percentage of German stocks owned by foreigners has surpassed 50%. Historically, when outsiders buy into a market, it makes for an outstanding long-term sell signal. Be patient Little Bear.