Thursday, December 29, 2011

Dax 20 day sentiment


Direction is unclear even a little bit bearish biased.

Many indicators are quite neutral at the moment. So, we are still waiting the break out up or down.


I have noticed that many Dax indicators are quite reliable with a length of 20 day. After all, Dax is a cyclical index according to how it trades, and also the underlying companies depend highly from the growth of the whole world.

When tracking how unique companies have traded last 20 days compared to index, we see that the situation is somehow neutral. 40 % of the companies are performing better than the index. In the graph below I use 10 day moving average to smoothen the indicator. The smoothed indicator is currently standing at 49%.


Still the volume index is leading down, yesterday it made the 20 day low.

Below there are marked all the past cases during last year when volume index has reached the 20 day low. In the short term, the odds are very high that we will eventually see lower close than 5771 during next 5 days. Although, in a little longer term this has also lead to a short term market bottom.

US money flow 28.12.2011

Yesterday's money flow was a little bit negative, but cumulative calculations still show positive progress.

Wednesday, December 28, 2011

Dax update 28.12.2011

Ok, the market closed at 5771 and now we are back inside the original triangle. Let's see if the market gaps down tomorrow. Then it will be more probable that we will be heading to lower close.



Dax sentiment week 52

Holiday trading with low volume as usual


Seasonality has been mostly bullish during the last week of the year and Last week I was hoping Dax to re-test 5676-5771. Seems like F-Dax futures tested it before opening. Anyway, the sentiment seems to be cautious. In despite of the cautious sentiment, it is possible to reach 6000 before re-testing 5676-5771.



Dax cycles indicator didn't finnish the last cycle down because of the central bank manipulation. Now we are trading in a range.


McClellan indicator usually behaves quite smoothly, but now it has also been ranging.


One issue to concern is Dax volume index which has been decreasing. Obviously it means that more investors have been selling into higher prices. Now there is a negative divergence, which eventually should lead Dax to lower levels below 5600. This could happen in January. Usually the weeks 2 and 3 are bearish, so the "big guys" who will come back from holiday could re-allocate their portfolios by selling stocks ahead the earnings season.

Friday, December 23, 2011

Dax 23.12.2011

Simple graph!

Still in a bear market and the previous bearish analysis are valid. Breaking the resistance at declining trend line and Fibonacci near 5900 seems to need some serious good news.



Merry Christmas!

Enjoy your holiday!

Thursday, December 22, 2011

Global sentiment week 51

At the forex market, one good barometer of risk sentiment is AUD/JPY. The global sentiment has been pessimistic since June. Currently it is consolidating or trading in a symmetrical triangle.


Dax intraday 22.12.2011

Break and closing above 5898-5900 would make 6024 as a short term target. If we cannot decisively break the declining trend line and fibonacci, the market has to pull back to try another time.

Dax sentiment week 51

Symmetrical triangle


Dax has been forming a symmetrical triangle. Now, we are waiting for a break out. This could be a little bit bearish, but I am not counting too much into that. Dax finally managed to get above 5767-5771 and yesterday it offered plausible support. So, if Dax cannot manage to break the declining trend line at 5890-5900 (or the upper at 6090) and begins to build a descending triangle, this would be bearish sign. This would be verified if Dax will re-test 5767-5771.


20 day highs vs. lows seems to be in a neutral zone. Thus, no trend here.


Currently 20 day stock performance is a slightly bearish, but when this indicator rises the odds for the bulls are also rising.


Again, overbought / oversold condition have no clue about the direction. No clear trend here either.

Dax cycles is also stucked at the neutral zero zone. However, it has made a lower low recently, which could indicate lower levels to the Dax. Apparently this could take 1-3 months.


 Same here with volume index which made lower lows. If the underlying situation is leading Dax and the politicians won't manage to manipulate the stock market, now it seems to be wise to trade in a triangle / range and wait the big move after the break out has occured.


According to Cognitrend sentiment studies, the optimism among Dax investors is at the highest level. Should I be concerned?

US money flow

Looks like the big players already placed their bets and currently are not accumulating any more.

Wednesday, December 21, 2011

Dax short term 21.12.2011

Today Dax touched the declining trend line and then pulled back. So, the bear market still holds. Technically Dax could go down to 5660-5670 within 2 - 8 hours and then rebound. Let's see when the break out from the triangle will happen. The odds are on the bear side.


Dax intraday 21.12.2011

The previous resistance at 5767 was broken aggressively. Let's see if it will act as a support for now on. Now it is obvious that the ceiling is at the rising trend line near level 5950. The indicators are quite overbought, and yesterday was strong up day. Usually after such a day, we should see see some weakness and condsolidation. If we remain in a short term bullish term, 5844 would be nice level to go long again.

Monday, December 19, 2011

Dax resistance/support

It looks like level 5767 has been acting quite important resistance / support level since for a month. Let's see how Dax can break upside and how it will support after that. If break above, it would be natural to reach 5850 and touch the 1 hour SMA(20), maybe test the 5767 support and then try to reach above 6000.



Short term view: break up to 5850 or pullback to 5720?

US money flow

According to peak in positive money flow on Friday, it seems that big players are betting on Santa Claus Rally.

Dax week 50

Support 5568?


The market has been acting quite difficult lately. Last week it seemed that 5568 is a downside target. Now the market is in a very interesting situation. 5568 is inevitable and there should(!) be a support with rising trend line. If this line breaks then we should see more downside and testing the 5360 lows would be probable. Now it would be nice to have a santa claus rally to begin. Upside target/resistance 5884 -5942 (no more than maximum 6070).

Sunday, December 11, 2011

Dax sentiment December

Short term bullish, but still need to treat this a bear market rally



Few short term (statistical) bullish points for the next week:

- Friday's big gap down was filled and the day turned very positive (bullish)
- Accumulated block trades money flow turned positive (bullish)
- Dax closed the week negative -1,55%, while S&P 500 closed positive +0,88% (bullish)
- 20 day stock performance indicates bullish trend
- Dax cycles is on the positive side

Bearish (intuitive) point of views:

- "Bigger" picture still bearish, because the declining trend line hasn't been broken
- 6200 - 6244 should be important resistance level for the next week
- 6500 would be even more important resistance level for the rest of the year
- If the above levels couldn't be broken during a month, the probability for reaching the low target 5568 will rise
- Weekly seasonality for the week 50 is not so bull-friendly
- Lower low in volume index would indicate lower low for the price index (not filled yet)


In the US, 5 day accumulated money flow turned positive since it turned into negative territory 8.11. Positive money flow among "the big players" almost guarantees S&P500 to gap up on Monday. So, the probabilities are on the bulls side. This it will probably also give some bullishness to Dax.


Trend in the stock 20 day performance is up.



43% of individual Dax stocks are trading better than than the index. Decline in this indicator means higher levels for the Dax. In normal circumtances, I would expect this indicator to fall at least below 40%.


Dax overbought and oversold cycle indicates that the selling is over for now. Normally this indicator would have fallen to a more extreme conditions, but obviously not at this this time because of the manipulation and the seasonality.


Volume index made lower low, and is showing negative divergence with the price index, which is not so good sign for intermediate term.


Dax will face some serious and very important resistance levels for coming days. Break above the declining trend line would squeeze out some short positions and encourage bulls.

Short term view:



Intermediate term view:



The bottom line: statistics will give bullish view for the short term, but one should still remain cautious for intermediate term.

Saturday, December 10, 2011

Dax weekly seasonality

The last two weeks of the year has historically been very bullish. If you would have invested only during months with 65% probability or more, it had been 85,7% profitable on annual basis. This year would have been up +22,9%.



WeekAverage-%Prob.StdevMaxMin
All0.20 %55.25 %3.15 %16.12 %-21.61 %
11.76 %65.00 %3.57 %8.91 %-3.21 %
2-0.61 %45.00 %2.92 %5.78 %-8.02 %
3-0.74 %40.00 %3.11 %3.42 %-8.73 %
4-0.33 %50.00 %2.97 %5.58 %-6.89 %
51.31 %75.00 %2.39 %5.35 %-3.11 %
60.02 %55.00 %3.21 %7.06 %-6.50 %
70.72 %61.90 %2.22 %4.32 %-4.98 %
8-0.69 %52.38 %2.96 %3.35 %-9.03 %
90.07 %42.86 %3.19 %7.41 %-5.57 %
100.28 %66.67 %3.04 %5.14 %-5.48 %
11-0.50 %38.10 %3.14 %7.83 %-7.57 %
120.50 %52.38 %4.14 %12.98 %-6.36 %
130.62 %71.43 %2.79 %5.15 %-7.15 %
141.39 %71.43 %2.82 %5.29 %-5.37 %
150.38 %57.14 %2.08 %5.32 %-4.09 %
161.23 %80.95 %1.87 %6.07 %-2.07 %
170.13 %57.14 %2.29 %3.81 %-5.38 %
180.02 %47.62 %2.62 %5.21 %-6.86 %
190.28 %47.62 %2.39 %5.98 %-3.47 %
20-0.30 %47.62 %2.43 %3.38 %-4.12 %
210.19 %61.90 %2.96 %4.58 %-5.56 %
221.10 %71.43 %2.52 %8.77 %-1.75 %
230.17 %57.14 %2.83 %4.85 %-4.97 %
24-0.04 %47.62 %2.66 %5.80 %-6.64 %
25-0.67 %38.10 %1.88 %2.86 %-4.53 %
260.31 %61.90 %2.56 %4.19 %-5.24 %
270.98 %61.90 %2.16 %5.87 %-3.24 %
28-0.21 %52.38 %2.81 %3.93 %-7.86 %
290.28 %61.90 %3.30 %8.79 %-5.78 %
30-0.88 %28.57 %3.43 %5.73 %-8.04 %
31-0.29 %52.38 %3.32 %3.67 %-12.89 %
32-0.19 %47.62 %3.27 %6.46 %-5.27 %
33-1.11 %42.86 %2.96 %3.35 %-8.63 %
340.34 %57.14 %2.30 %3.90 %-5.22 %
35-0.04 %57.14 %2.20 %3.73 %-4.16 %
36-1.13 %38.10 %3.50 %3.93 %-8.82 %
37-0.75 %42.86 %4.24 %7.39 %-12.99 %
38-1.03 %42.86 %3.86 %4.91 %-8.79 %
390.08 %42.86 %4.37 %13.75 %-7.09 %
40-0.10 %52.38 %4.31 %5.75 %-13.13 %
410.10 %66.67 %5.90 %7.96 %-21.61 %
420.99 %57.14 %3.92 %12.69 %-3.97 %
430.31 %52.38 %3.66 %6.80 %-10.16 %
440.85 %61.90 %4.99 %16.12 %-5.99 %
450.97 %61.90 %2.38 %7.13 %-3.88 %
460.66 %71.43 %2.69 %4.12 %-4.62 %
47-0.50 %33.33 %3.97 %7.21 %-12.37 %
481.88 %66.67 %4.03 %13.13 %-3.13 %
490.22 %52.38 %3.05 %5.53 %-6.76 %
50-0.57 %45.00 %3.15 %6.43 %-5.57 %
510.96 %70.00 %1.88 %6.74 %-1.72 %
520.93 %70.00 %2.56 %6.97 %-6.09 %
530.58 %75.00 %0.61 %1.19 %0.00 %