Spread in times of uncertainty
Yesterday, Putin informed about his intention to seek payment in Rouble for its natural gas from "unfriendly" countries. According to AG Energiebilanzen, natural gas is Germany's largest consumed energy source, making up for close to 31 percent. Oil is second with a share of almost 29 percent. According to ICIS, about 30 percent of the natural gas in Germany comes from Russia.
Yesterday, Putin informed about his intention to seek payment in Rouble for its natural gas from "unfriendly" countries. According to AG Energiebilanzen, natural gas is Germany's largest consumed energy source, making up for close to 31 percent. Oil is second with a share of almost 29 percent. According to ICIS, about 30 percent of the natural gas in Germany comes from Russia. Also, Germany is Europe's biggest importer of Russian oil. It means that Germany has exposed itself to the demand from Putin.
The German DAX fell yesterday by 1.3 percent and is currently consolidating around Fibonacci 50.
DAX (in EUR) March 23 to April 23, 2022
While Swedish OMXS30 fell 1.2 percent.
OMXS30 (in SEK) March 23 to April 23, 2022
Stock markets have been recovering nicely since the local lows in earlier March. But uncertainty is still high given the war in Ukraine and inflation. A spread may be handy in such a scenario: The extended leg OMXS30 may be an alternative with limited exposure to Russian energy combined with the short portion of DAX, as Germany has exposed itself to Russian energy exports.
Below is the spread OMXS30-DAX.
OMXS30 minus DAX (in EUR) weekly five-year chart
DAX (in EUR) weekly five-year chart
OMXS30 (in SEK) weekly five-year chart
The full name for abbreviations used in the previous text:
EMA 9: 9-day exponential moving average
Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.
MA20: 20-day moving average
MA100: 100-day moving average
MA200: 200-day moving average
MACD: Moving average convergence divergence
Risks
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