German DAX continues and adds to the recent surge. The mighty DXA closed “properly” above the 200-day average for the first time in ages. As we outlined earlier, the DAX loves latest Chinese PMI stats.
DAX has been underperforming for a long time, but note this has changed over past sessions. The DAX is fractionally better than the Eurostoxx 50 on the 1-month chart.
One of the key German sectors is the beaten down and hated autos space. The SXAP index closed above the 200-day average today as well as closing on the highest levels since early autumn. What could potentially be interesting, and be setting up for a major squeeze, is the fact autos is a very shorted space.
One of the best performers in this auto rally has been Daimler. The stock broke violently above the 200 day and has continued. Even Volkswagen and hated BMW have been spiking higher last 24 hours.
Watching the DAX closely here, especially the autos, is probably the key to European direction going forward. Both DAX and German autos are hated and massively shorted. Take these names a few percent higher, and a brutal squeeze can be on the agenda.
Source, charts by Bloomberg