Investor anxiety is mounting amid escalating market volatility, says Jochen Stanzl, a market analyst at CMC, in an interview with FOCUS. He warns that if the DAX slips below the psychologically critical 20,000-point threshold, it could trigger a new wave of sell-offs. Stanzl outlines where he sees the next technical support level—and what investors should consider doing right now.
S&P 500 Suffers Historic Losses—Is This the Start of a Black Year for Markets?
Global markets have experienced a dramatic downturn, with the S&P 500 plunging 10.5% over just Thursday and Friday. According to Deutsche Bank, such a sharp drop has only occurred three times since the end of World War II.
Stanzl believes we are witnessing more than just a one-off correction: “With China imposing 34% tariffs on all goods imported from the US, what initially seemed like a bluff from the White House has turned into a full-blown trade war,” he explains.
In response, potential buyers are staying away, further draining liquidity from the markets. “Order books are drying up. High volatility triggers automatic shutdowns in algorithmic trading systems, reducing liquidity even more,” he adds.
The result? An even sharper spike in volatility. “It’s a vicious cycle. At the same time, US equities are being downgraded, and earnings forecasts are being revised downwards. Given that this is the steepest tariff hike in over a century, even the International Monetary Fund admits it needs more time to assess the full consequences,” Stanzl warns.
Trump’s Next Moves May Add Fuel to the Fire
According to Stanzl, President Trump still has several unpredictable moves at his disposal that could rattle markets further. “It’s unclear what concessions he expects in return for potentially softening tariffs. But it’s likely that any demands will be just as forceful as the tariffs themselves.”
He also refers to the so-called “Mar-a-Lago Accord”—a controversial strategy allegedly being followed by the White House. Under this policy, the US could nationalise foreign-held Treasury bonds, converting them into 100-year debt instruments with low or no interest. In exchange, foreign creditors would receive continued military support from the US in times of crisis.
“These scenarios are extremely dangerous. Many assumed Trump would never go this far. But after what we saw on ‘Liberation Day’, that assumption no longer holds. He has now introduced tariffs even harsher than those outlined in the Mar-a-Lago Accord—and apparently did so without consulting his ministers,” Stanzl claims.
Pressure on the DAX Mounts
The DAX is teetering close to a key psychological threshold. “The next support level I see is 19,300 points,” says Stanzl. “You can sense growing nervousness, especially in the futures market. Between Wednesday and Friday last week, trading volume in DAX futures rose sharply.”
He points out that the index is now hovering just above the 20,000 mark—an important psychological line. “If it drops below that, not only would it lose this support level, but it would also fall beneath its starting level for the year, wiping out all gains from the past two weeks. That would almost certainly spark further selling.”
Since Tuesday alone, the DAX has shed 1,900 points. From its mid-March peak, the loss now totals 3,800 points. Should the 19,300 mark fail to hold, Stanzl believes the next meaningful support lies at 17,500 points.
What Should Investors Do Now?
Despite the chaos, Stanzl advises investors to keep calm. “It’s crucial to monitor the support zones at 19,300 and 17,500. Wait for signs that the market is stabilising before making any major decisions.”
He cautions that it could take several weeks before the markets fully absorb the recent sell-off. “This kind of correction doesn’t resolve itself overnight. Patience and discipline will be essential over the coming period.”
