On Monday we explained that the DAX and Euro Stoxx 50 both had reversed lower on important resistance levels.
DAX has since then continued falling rather violently and is down to the first big support around the 12k level. There is more support area some 150 points lower.
DAX is down 5.3% in 8 sessions. Pushing a break down below these support levels is probably tempting for the shorts, but we wouldn’t be surprised to see another reversal just when it feels the most bearish.
Euro Stoxx 50 is showing a similar picture to DAX. Sharp sell off over past sessions and the index entering huge levels. 3300 is very big and important area to watch for possible support.
European VIX (V2X) has shot up higher, but note we actually didn’t reach the same “panic” levels in volatility as we saw in August, despite the market actually trading lower.
Watch volatility here closely as it might offer clues for a possible reversal on big support levels for both the DAX as well as the Euro Stoxx 50.
V2X (orange) and DAX (white).
Source: charts by Bloomberg