Dax indicators, regular update

Check out the indicators, where most of them are almost at their highest levels. Still they are pointing up, but soon topping?

Dax indicators 10.5.2012

Even I wrote that the short term is up, the intermediate term trend is down. Yesterday volume index made lower close while Dax close higher. 70% of cases this has indicated lower lows for Dax. Check out my other indicators as well. They are easy to interpret and currently seemingly pointing down.

Indicators

Check out Indicators page where you can find up-to-date graphs for studying purposes.

Dax indicators 16.4.2012

The support at 6544 managed to hold, so now we can try the opposite direction and above 6800. RSI is already making higher lows, which is a positive signal.

20 day high-low ratio is already at low level comparing to normal cyclical behavior.

Dax modified RSI is also showing sings of a bottoming process.

Also the risk appetite is growing. 

Overbought and sold already converged, so the best shorting opportunities have gone so far.

Dax volume indicator is in unison with Dax. 

Bear territory seems to end soon.

Dax indicators 27.3.2012

Dax still has negative divergence with indicators. Even the divegences haven't been working out lately, this should be treated with cautious.

Dax had two 52 week highs, which is a bullish signal. 

20 day cycle seems cautiously positive, even the latest performance hasn't been clear.

Dax Cycle Indicator is based on 2 month price behaviour. Nor does this indicator gives clear direction. 

Dax Volume Index has lately acted in unison with prices.

Today's index setup will be to close the long position with index at 7170 or near close and then take short position for two days.

Dax indicators 16.2.2012

Last week I was expecting Dax futures to decline at least to touch it's rising trend line or SMA(20). None if this hasn't happened yet. In despite of this, Dax hasn't even able to make a new highs for 5 days.

Volume still hasn't been interested of this rally. Even the latest performance points down.

Accumulation took a spike downwards, so the investors were selling heavily. 

Dax McClellan indicator is already pointing it's way down.

Dax cycle indicator has also peaked. In the below graph, I have marked all the previous cases when the indicator has peaked. You can compare it with index.

It is clear that the uptrend is not very strong and it is losing it's momentum. My trend following system keeps 6810 as a critical level to stay in an uptrend. Even the uptrend holds, the upside profit should be limited at this point. Investors have been buying and hoping and soon they could be selling on the news.

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.

Dax sentiment week 40

Contrarians push for a stock market rally

Selling has decreased continuously as can be seen from the above graph. It is still expected that buying would wake up investors interest. Soon we could be in a good phase of optimism. The law of inertia usually brings the green and the red line together and that is about to happen sooner or later. When we see green buying indicator increasing, the index could surge strongly for a while.

The individual stocks are still broadly performing better than the index. Usually this has marked the short term market bottoms.

 Yesterday, we didn't see any 52-week lows, which is a good sign.

Dax sentiment week 39

Positive signs

We have seen some positive signs lately on last days. Opening gap on thursday, statistically positive day on Friday, and continuation of these bullish patterns on Monday. On Monday, we already saw the first crossover of 50 day moving average when Fresenius Medical Care reached it's 20-day high. After 29.7. all Dax stocks have traded below 50-day moving average.

Although, Beiersdorf and Fresenius SE dropped to new 20-day lows, the technical signs have been more positive than negative. 30 percent of Dax stocks are already above their 20-day highs, which seems bullish for short term.

Indicator for measuring oversold - and bought is still in quite extreme condition, since buying is yet lagging. The expectation is, that the condition will recover to the balance. When green buying will began to show more positive development, the price index (Dax) could quite quickly recover to higher levels. Anyway, we still need a few positive news to have the impact.

Seasonality is bullish biased for the end of the year. Last four weeks have been negative biased since 1990, and the probability for positive week has been about 40%. The seasonality for the rest of the year gives hope for bullish investors.

The average returns have been more positive for the rest of the year.

The volume index, based on invidual stock volumes, seems to be syncronised with price index. As you can see from the aboce graph, volume index began to show negative divergence already in last May making lower highs and lower lows. At the same time the price index (Dax) was trading in a range. Recently the volume index hasn't dropped below the level of June 2009.

Technical indicators are showing positive divergence for short term, especially RSI. Daily chart gave positive signals last thursday (exhaustion gap), friday (hammer candlestick), and monday (bullish continuation). However, long term picture is negative because of negative and downtrending TRIX and MACD.

Dax daily technical analysis 23.9.2011

Gap down thursday didn't disappoint the statistics. Just study the statistics from my previous posts. Could be a short term trend reversal, but we need to see more bullish signals on monday.

Dax sentiment 23.9.2011

Buying still lagging

It is obvious that investors are not buying stocks at the situation. The sellers became again aggressive yesterday thus making the index close almost -5% lower. During this week, we have seen 3 new 52-week lows: Deutsche Post, Lufthansa and Thyssenkrupp. The chart below tells the story about bulls and bears: if the buying indicator (green) won't start to climb soon, the bears are in control.

 

Index has been dragged down by fewer and fewer stocks that has been very heavily sold, especially banks. However, 60% of stocks have been performing better than the actual index. This seems very promising if we want to find short term bottoms, even this ratio can go much higher as can be seen during the 2009 lows.

 

According to survey made by Cognitrend the sentiment of Dax investors have been positive. 

Dax update 31.8.2011

A strong day

Dax surged with low volume, which is not surprising. Stocks can go up with low volume, but going down needs bigger volume as you can see. Normally when the volume peaks and index falls, it has been good opportunity to buy.

Extreme sold and bought conditions are still indicating trend change. However, we need to see demand curve to gain, although supply has already turned. It is obvious that investors are still cautious to buy after such a decline in stocks and recent weak economic reports. We need to watch the demand very careful if starts to accelerate, because we still are on the edge.

 The cycle indicator, which is constructed from the previous supply and demand curves, is indicating a turning point for Dax.

We haven't seen any 20-day or 52-week new lows during last 3 days. One interesting measure to watch is the number of individual stocks performing better the actual index. In capitulation and market bottoms, the level seems to peak. Vice versa, when the market tops fewer and fewer stocks are actually performing better than the index. 31.8. we had a situation where 8 stocks performed better than the index. In the above picture, I use 10 day moving average to smoothen this indicator and better showing the trend.

In bear market, it is normal to see 52-week lows and no new highs. Actually, we haven't seen any 52-week highs recently.

Trin peaked to negative level quite strongly, which indicates investors were selling on strength. It still might be the strategy to sell on rebound. Although, strong negative TRIN might be the consequence of low volume.

It seems that investors are in wait-and-see mode. The selling has settled, but still not many buyers. Earnings report season is starting soon and we can see strong rebound. Anyway, these seems a good opportunity to be a contrarian and establish long positions to Dax. I would still remind to put stop loss to the recent market bottom level.

Dax indicators 29.8.2011

Looks like a turning point

Our oversold indicator reached extreme level, that was not seen even during the 2008 financial crisis turmoil. Anyway, the underlying indicator is showing a little improvement as can be seen from the picture below. At this point, we are expecting the law of inertia to bring the condition for supply and demand to "balanced" level. Before we reach the level, Dax has two options: to consolidate or reach higher level. We are expecting the latter to happen.

 20-day highs versus lows showing improvement. As can be seen, the conditions was very abnormal when above indicator (orange line) reached it's minimum point.

 Normalised TRIN made surged nicely to positive levels which is needed to achive higher levels for the underlying index. 

 Ok, the volume hasn't accumulated yet. This would be, the last confirmation for (mid-term) bulls.

Overall the situation looks very promising for bulls. The market could turn into positive before earnings report. The risk/reward for long positions looks very promising at these levels.

Dax 5.8.2011 high volume with some support

Lower stock prices seemed to interest investors as the volume surged almost to the highest level during this bull market.

Previously I wrote that the volume index hasn't confirmed the lower prices yet, but eventually this happened.

Interestingly, McClellan Indicator fell to even lower level than during the bear market 2008-2009...

Since TRIN turned positive, we could believe that some buyers are awakening, and thus, bears are becoming weaker.

Volume-based cumulative accumulation/distribution based on stock volumes also peaked into positive territory, so this suggests rebound.

Dax oversold/overbought indicator calculates supply (green) and demand (red). The sellers have pushed the red line almost too high, so within a week we should see a rebound.

Quite quickly, there are 9 stocks that made 52-week lows last friday. As you may notice, previously this happened 28.1.2008, 23.7.2008 and during Lehmann collapse. Even during the capitulation and the lowest index level in March 2009 we didn't get as many 52-week lows.