Tuesday, January 31, 2012

Dax stock performance overview

9 stocks less than -10% from 52 week highs and 2 stocks less than +10% from 52 week lows.

Adidas55.5057.6241.76-3.68 %32.91 %
Allianz83.36104.1756.16-19.98 %48.43 %
Basf59.8169.8042.19-14.31 %41.76 %
Bayer53.0359.4435.36-10.78 %49.97 %
Beiersdorf46.1346.5038.26-0.80 %20.57 %
BMW64.5573.8543.49-12.59 %48.42 %
Commerzbank1.816.471.12-72.02 %61.61 %
Daimler42.3555.1529.01-23.20 %45.98 %
Deutsche Bank32.2647.8120.78-32.53 %55.25 %
Deutsche Boerse44.5760.1835.65-25.94 %25.02 %
Lufthansa10.5515.818.25-33.27 %27.88 %
Deutsche Post12.5413.338.90-5.93 %40.90 %
Deutsche Telekom8.7210.947.88-20.29 %10.66 %
E.ON16.1923.3812.50-30.75 %29.52 %
Fresenius77.4778.9958.80-1.92 %31.75 %
Fresenius Medical Care54.3055.8042.56-2.69 %27.58 %
Henkel47.4650.1536.52-5.36 %29.96 %
Infineon Techno6.908.314.89-16.97 %41.10 %
K+S36.4057.7633.25-36.98 %9.47 %
Linde118.25127.8094.63-7.47 %24.96 %
Man79.3696.7550.78-17.97 %56.28 %
Merck80.1780.1855.92-0.01 %43.37 %
Metro29.1554.3826.77-46.40 %8.89 %
Munich Rueckvers99.43119.1677.80-16.56 %27.80 %
RWE29.1549.9521.22-41.64 %37.37 %
Heidelberg Cement37.0853.7223.92-30.98 %55.02 %
SAP45.8746.0432.88-0.37 %39.51 %
Siemens72.2695.5459.72-24.37 %21.00 %
Thyssenkrupp21.1135.4316.31-40.42 %29.43 %
Volkswagen136.80152.2086.40-10.12 %58.33 %
DAX6444.457600.414965.80-15.21 %29.78 %

5 stocks with negative 20 day performance in line with the weakened upside momentum.

Dax sentiment 30.1.2012

We have seen four 52 week highs during last 5 days when Beiersdorf, Fresenius, Merck and SAP have been rising to higher levels. Beiersdorf and Merck are already trading over 30-times their earnings while Fresenius is at 19 and SAP below 16 (according to Yahoo Finance). So, all these four are highly above the average Dax P/E.

Anyway, the volume dropped to 30% from the recently seen volume. The investors just seem to be waiting a good reason to buy or sell even the upside seems to be limited.

20 day highs versus lows is already quite high.

I am watching few indicators carefully to see early topping sings or weaknesses. McClellan Summation Index is based on advance/decline -ratio, and it has proven to be quite reliable indicator. For today, we would need to see 8 more declining than advancing stocks inside Dax if we want this indicator to to decline (ie. 19 declining and 11 advancing).

Dax volume index is dragging a little bit compared to the price index.

US money flow 28.1.2012

Still on the positive side.

Monday, January 30, 2012

Dax sentiment 30.1.2012

Few updates

Stock performance has deteriorated lately. However, only 2 stocks has negative 20 day performance.

The performance of individual stock in a basket vs. index has been showing a short term market top lately.

McClellan Summation Index is still pointing up, but may be topping soon. If we get at least 27 declining stocks (close to close) today, then the indicator will turn into bearish territory.

Sunday, January 29, 2012

US money flow 27.1.2012

We saw relatively big negative outflow day during Friday even the cumulative outflow is still on positive territory. We will watch closely how the situation will develop.

Friday, January 27, 2012

Dax sentiment 26.1.2012


Commerzbank has obviously been the strongest performer during last 20 days.

However, only a little bit over 40% of the stocks have performed better than the index during last 20 days.

Rarely all the stocks are performing positively during 20 day period. Now we have 27 positive performers.

20 day highs divided by lows has been positive too long.

Dax cycle seems to be a little bit high, maybe we are topping soon.

Sales have become stronger lately even the buying has remained high.

Trading volume has been increasing lately.

McClellan Summation Index has been leading the way up. We haven't reached the extreme level yet and anything is possible before the indicator will begin to decline. 

Although, TRIN has been negative already 3 days in a row, which means that the investors have been selling more than buying at these levels.

The moving average of Trin also turned negative. Even it is possible that the market could rise a little bit, the probability of short term market top has been rising. Previous similar cases with Trin has been marked in the below graph.

Overview: at the current situation, the risk for the downside correction is higher than the upside reward. Sentiment has been cautiously bullish for some time, but the economic risks haven't been resolved. The market will become exhausted. So, for now on, during the next 1-2 months we should see correction to 6000, or if the market cannot find any good reason to sell, at least consolidation. It would be wise to step out of long positions or aggressive traders could begin to build their short positions.

Monday, January 23, 2012

Dax sentiment week 4

Volume returns

Dax has incredibly climbed above it's 200 day moving average. There hasn't been much difficulties to break through resistance levels. Now Dax should have a challenge to climb further above October highs.

Stock performance has been revealing normal short term bullishness for couple of weeks.

Cycles indicator is already quite high, almost 60%. Previousy this high level has indicated topping process.

Trading volume seems to be doubled in two days comparing to previous months, even this kind of volume peaks should have some meaning behind them. It is obvious that some big investors have been underperforming indexes lately and should soon allocate more to stock market. How many believe that this peak in volume means exhaustion or a start of a new bullish trend?

The latest concern was volume index with negative divergence. Ok, this divergence has been corrected in two days.

Even the volume has been strong during last two days, there is one thing to consern: advancing and declining stocks. In despite of strong volume, there actually have been more declining stocks than advancing stocks...

Accumulation/distribution peaked very aggressively.

...only 3 cases when Accumulation/distribution has been this high...

I have been little bit bearish lately because the recent stock market rally hasn't seemed very healthy, because volume has been low and many indicators have been indicating negative divergence compared to prices. It is obious that the rally has partly been a short squeezing. Now the short positions should have been taken out and we will see what will happen next. After all, one should remember that stocks go up by stairs and down by elevator. I personally wouldn't go long at this point. The market is expected to decline a little bit first to attract investors to invest more.

Tuesday, January 17, 2012

Dax sentiment and volume 16.1.2012

Current market situation is being led by very low volume. In the other words, most of the investors are not willing to buy or sell. Usually, market has tendency to go up during these kind of situations.

During last 10 days, only 2 days has got more advancing stocks than declining stocks.

According to TRIN studies, the market has more volume on declining stocks than advancing stocks.

The volume index hasn't been rising lately, so either the prices has to come down or someone should start buying stocks heavily.

This seems a little bit difficult situation, so it would be better to stay on sidelines and wait. It seems that the probability for a downside correction has risen. During next 3 months we could see lower levels than where we are at the moment. It is also an option expiration week in the US, so during the low volume, it will be easy to play many options worthless.

Thursday, January 12, 2012

Dax resistance / support 12.1.2011

Dax broker up the descending trend line and has now been trying to push up through strong resistance area 6170-6190 and Fibonacci at 6203.

In a shorter term it looks that Dax should go lower (and attract more institutional investors to buy) if it wants to go higher. 6050-6080 would be fine. Below 6000 the picture is starting to look bearish and the gaps up  would have a exhaustion meaning and confirmation for a trend reversal.

I have been watching US markets closely lately, because it is obvious that is has been keeping the stock market up. S&P500 has already made higher level and is now trying to push up even this would be perfect level to make a trend reversal.

It also seems that money inflow hasn't been strong anymore. Money outflow at these important resistance areas could definitely trigger a decline in stocks.

Wednesday, January 11, 2012

Dax sentiment 10.1.2012

The volume has been extraordinary low. Usually volume drops at these levels only during holidays. So, no-one wants to do anything. Big investors are not willing to sell nor buy. However, on Wednesday we saw volume spiking above it's 10 day EMA.

... but negative TRIN reveals that most of the volume was allocated on declining stocks.

...and it is a little bit annoying that stocks are behaving like this would be a market bottom. Previous times this condition has implied consolidation or decline ahead.

Overview: Gap up + positive daily candle + volume accumulation (even the volume has been low) + negative TRIN = bearish sign? We have seen gap ups lately, but none of them has been runaway gap. Taking into consideration that there will be heavy resistance at 6170-6190 and under these conditions gap up could mean exhaustion gap.

Seems like Dax would need to go lower first if we want to break up. Only very positive news from the economy would give Dax enough interest to go upper levels near 6400.

Tuesday, January 10, 2012

Dax sentiment week 2

Dax hasn't been able to make a higher high after 3rd January. Weekly seasonality favors bears for the next 2 weeks. Short term view looks like drop under 6048 would be bearish. Until then we would more likely to see range trading between 6048-6169. There is also strong resistance at previous month highs between 6170-6193. Aggressive break up through that level, would lead the index to near 6400.

The volume dropped at it's lowest levels for ages. It seems that nobody wants to do a move until we get some good or bad news. Anyway, the prices can go up with low volume, but the the prices will definitely come down with high volume. Thus, the current situation needs cautiousness.

Again, the volume index based on volume calculations from individual stocks made lower close. According to my backtesting, this would give 95% probability that Dax index would make lower close during the next 5 days.

...on the other side, volume index 20 day lows have usually marked some kind of a short term market bottom. So, we will watch carefully if volume index will make another low today.

Volume accumulation / distribution is on the negative side.

Trin is on the negative side, which means that declining stocks have been getting more volume.

McClellan Summation Index hasn't yet turned. Usually the indicator is quite autoregressive and smooth. So until it turns down, we are waiting and not making any aggressive moves.

Overview: volume studies are more bearish than bullish. Seems like Dax is currently making a short term top which will take some time. After that it is possible that we will see a violent pullback below 6000 and towards 5500. Before breakdown below 6048, it would be wise to wait and stay in cash. If the index will advance over 6300, it would be good opportunity to go short.

Thursday, January 5, 2012

US money flow 5.1.2012

Positive cumulative money flow continues.

Dax sentiment week 1

Europe bearish, US bullish

It seems that US investors have been trying to push the stocks up, otherwise Europeans would have dragged the market down. Also Asians have been in a bearish mood lately. It seems that there are more bearish signals than bullish even the market hasn't wanted to decline, yet.

Dax McClellan indicator is currently at level zero, which would be nice touch if we want to have a turning point here.

Advancing stocks minus declining stocks turned negative.

Dax McClellan oscillator is way too high! Haven't seen this high level for ages.

20 day stock performance has been building up negative divergence. Normally this high level would mean short term market bottom, but this doesn't look like a bottom. So, it seems that Dax should decline a little bit to have a real market bottom.

Volume index hasn't followed the advance in prices. Even the price index made high levels, the volume is waiting the prices to decline.