Chairos'  Instablog

On April the 29th I posted "We escaped the big drop - for now". Back then, I was pessimistic on the German market, but thought that it might hold up a little longer. After a breakdown below 6.600 (DAX30), it seemed to have recovered.

Today, the DAX is again below 6.600. I will go into details for single stocks later on, but more then 50 % look ugly. We had elections in Greece since then (leaving no possibility for any government at all or even more so a stable one), in France (Hollande winning with a very left wing program, demanding top tax rates at 75 %), in Schleswig-Holstein/Germany (leading to no stable government, unless socialists and conservatives can get together), and in Nordrhein-Westfalen/Germany (ending with a slide to the left in the state with highest population of Germany).

Economic outlook is worse than it has been weeks ago. Hard landing in China is more prominent in the news now, US economy disappointed on job growth, the PIGS countries once again in discussion in Europe.

Looking at the 30 DAX stocks, my chart filter gets the following result:

BUY: Baiersdorf

NEUTRAL: Addidas, Bayer, BMW, Deutsche Börse, Dt. Post, Dt. Telekom, Fresenius Medical Care, Fresenius, Henkel, VW

SELL: Allianz, BASF, Commerzbank, Daimler, Deutsche Bank, Lufthansa, EON, Heidelberger, Infineon, K+S, Linde, MAN, Merck, Metro, Münchner Rück, RWE, SAP, Siemens, ThyssenKrupp

This gets us to 1 up, 11 sideways, 18 down.

As long as the DAX stays below 6.600, I would stay out of this market or short it.

Disclosure: I am short SI.

Additional disclosure: I might initiate short positions on all or some of the SELL suggestions within the next 72 hours.