DAX Before Comeback: Can Seasonality Force the Year-End Rally?
The DAX is under pressure, but hope is alive: early November has historically been the starting signal for the year-end sprint. Seasonality is a valid factor in financial markets, significantly influencing investor sentiment. Last Friday, the DAX closed with a loss of 0.69 percent, marking the second consecutive negative week. However, after-hours trading offered a reason for hope: buoyed by US exchanges, the index managed to nearly recover its losses completely. This raises the critical question: Can the feared major correction still be averted?
US Budget Breakthrough as the Lifeline
The decisive, sustainable impulse could once again come from the US. A softening of the entrenched positions between Republicans and Democrats regarding the US budget is emerging. After the situation had become so tense that rumors about restrictions for US troops stationed abroad circulated, stock markets reacted positively to signs of a potential breakthrough. This political impulse might be arriving just in time to prevent major disruptions in global financial markets.
Market Sigh of Relief: DAX Bulls Launch Counter-Offensive
Looking at the German leading index from a technical chart perspective, the situation has clearly improved due to the buying impulse on Friday evening. The buying pressure is evident, and the market could stabilize to climb back above the 24,000-point mark as early as today, Monday. However, if the correction is to be sustainably averted, this positive effect must not be a mere flash in the pan. More than just a short-term recovery is needed to confirm the seasonality and substantiate the year-end rally.
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