The German DAX indices recently new all-time highs, and Traders’ Leadership Council Managing Director Malte Kaub joined Benzinga’s #PreMarket Prep this week to talk about the movements.
The German market is part of what’s driving the overall economy in Europe right now and attracting a lot of investors, Kaub said. Over the summer, the DAX indices reached all-time highs over the 10,000-level.
“These are unseen and unprecedented levels, and quite breathtaking,” he said.
Kaub explained that these highs are most likely fueled by the European Central Bank and probably not on fundamentals.
“What we found interesting is that when we discussed the 10,000-level with traders, everybody was uber bullish, and everybody just wanted to buy and get in on it,” he said. “They all felt they missed on the performance.”
After going above the 10,000-level in June and July, the DAX experience a few pullbacks and dipped all the way down to the 9,000-level in August.
Kaub, however, said that in a webinar he held last week while the DAX was closer to 9,000, everybody was talking about selling at the lower levels.
“So it’s really interesting to see how the market levels flip psychology of people. And really everyone wants to go in at the highest levels, and when there’s a decent pullback, which clearly provides some opportunities to get on board, then suddenly, everybody wants to sell at what actually was the lowest level,” he said.
Kaub also talked about the strength of the U.S. dollar and quantitative easing.
Check out his full interview here:
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