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.

Dax long term

This situation reminds me of January 2008

Statistics about Dax down more than -15% from previous week's high

During this week Dax has dropped more than -15% from previous week's high.

In history we have seen such drops mostly in bear markets, but there have been few cases also during bull market as you can see from a picture above.

I wanted to find out if bulls have had any edge following this kind of crazy weeks.

Statistically next week's have been looking like following for bulls:

	1 week	2 week	3 week	4 week
median	-0,99 %	4,32 %	6,37 %	5,06 %
average	1,99 %	2,84 %	4,59 %	3,88 %
probability	47,62 %	61,90 %	76,19 %	61,90 %
max	16,12 %	18,50 %	22,12 %	21,40 %
min	-10,16 %	-12,05 %	-17,25 %	-22,12 %

The probability for rebound is not very promising even the averages and medians seem very high. If see any rebound, we should mostly expect it during the next 3 weeks. After 3 weeks, the bulls have lost the edge.

Next we want to know where the next week's high have been according to this week's close.

	high
median	6,31 %
average	7,58 %
probability	95,24 %
max	18,47 %
min	-0,28 %

The same statistics for low compared to this week's close.

	low
median	-4,67 %
average	-4,71 %
probability	85,71 %
max	2,38 %
min	-16,04 %

Statistics for possible lower low:

	low
median	2,96 %
average	2,15 %
probability	38,10 %
max	16,95 %
min	-14,01 %

According to history, lower low has only 38,1% succeed rate. It shouldn't surprise to see strong rebound, but it looks like very volatile next week. I would buy speculative longs from these levels.