Today the DAX broke its short term downward trend, no matter how you draw the trend line.
A break of the trend line does not mean, however, at all that it goes now simply further upward. You have to look at it like a door that has now been opened, our eyes can now look upwards again. This is a significant change compared to last week’s situation. But whether Mr. Market really goes through this open door is by no means certain !
Today it was certainly positive that also the heavily beaten values like Klöckner (WKN KC0100) jumped on, we have not seen 5% plus with the title for a long time. The same was true today for a ST Microelectronics (WKN 893438), which boomed at 8%. We also saw a certain catch-up effect today on a number of other stocks that have been sold off particularly well in recent weeks. It is also positive that the DAX was able to regain the 6400 at the closing price.
Nevertheless, I remain cautious overall and sceptical about the bounce. Because nothing of what we have seen in the last two days went beyond a technically almost compelling counter-movement. And if you look at the extent to which certain stocks have lost ground in the past week, the counter-movement is by no means characterised by particular strength and conviction. The weakness in late Wall Street trading was not a particularly good sign today either.
EU Special Summit
As far as I can tell, this bounce has so far been fuelled by overstretched market technology and the hope for the EU Special Summit. However, the overstretched market technology has already been partially dismantled by today’s day as a catalyst. There remains hope for the EU special summit and the market has already priced in some positive expectations, which offers room for disappointment. In this respect, the real test will only come tomorrow or Thursday, depending on how long the summit lasts and whether resilient results are already leaking tomorrow during trading hours.
So we are once again in the hands of politicians and betting on it is a lottery game without an edge for us – a game in which I am therefore reluctant to participate. I have therefore not changed my position so far and remain in the Imvestmentdepot largely out of the market with only little long exposure. I played the bounce today primarily for a short time in the trading system. Should a huge rally surprise me tomorrow, I’m unlucky and partly miss it because I jump up late. But that’s less of a risk for me than buying into a potential bull trap too early and being pushed under water again with fresh long positions like a millstone around my neck.
If I were forced to choose one side today, I would have a slight preference to say that we are lower on Friday than we are today. Fortunately, I don’t have to make this decision, especially as my preference for the short side is also very low, 55:45, so let’s just wait and see what happens at the EU special summit.
There are really massive movements every day in US coal stocks.
If an Arch Coal (WKN 908011) was 7% in the plus yesterday, today it went down again by a similar amount. The trigger was probably Patriot Coal (WKN A0M5QB), which today fell like a stone with over 30%! I do not know the cause and can only make assumptions. But for me it looks like Patriot Coal is pricing in a possible bankruptcy. Patriot simply isn’t big enough and probably doesn’t have enough financial muscle to survive these historically low coal prices for a long time. As a result, of course, all the shares in the sector were swept away.
This sounds crazy, but with such a brutal pig cycle as the current one for US coal, bankruptcies simply belong to it and are positive for the market. This would remove supply from the market and clean up the playing field. Large, financially strong corporations are therefore more likely to benefit from the bankruptcies of the aggressive small companies. As you know, I am in the sector only with Arch Coal and Peabody Energy (WKN 675266), each with small base positions in the market. In both cases, I’m not worried about financial viability at the moment. However, I don’t see any reason to increase my positions yet, even though the back and forth rather speaks for a volatile bottom formation, I would first like to see the beginning of a sustainable upward trend before I continue to expose myself in the sector.
And there is a historic moment to report today that once again largely bypasses the German press.
SpaceX today successfully launched the first commercial flight in the history of space travel to the International Space Station (ISS).
Congratulations to Elon Musk ! Yes, exactly, Elon Musk, who is also CEO of Tesla Motors (WKN A1CX3T) and certainly one of the most courageous entrepreneurs on this planet. While I am trying here to bring my family and my trading in line with the blog, he leads “just” SpaceX and Tesla into truly historical upheavals. Chapeau ! By the way, Tesla Motors was 7% up today.
This could have something to do with the flight of SpaceX, because it shows once again that Elon Musk is not a crackpot, but knows exactly what he is doing. And if he can get the launch (here of the Model S) done cleanly at Tesla, the course could soon be higher.