Dax week 33

Dax finished the week above the declining trend line, which we have been watching closely. Stochastics is indicating overbought condition which is not yet a selling sign. The condition could easily last 1-10 weeks.

On a daily basis, technical break-out above the longer term declining trend line was strong and without volume surge. Therefore the break out should not be treated an exhaustion and we will see higher high during next week.

It is expected that all the Dax stocks would climb above their 50 day moving average before intermediate term market top.

McClellan Summation Index is in a strong uptrend.  

Risk behavior has been declining even the index has been rising, so risk appetite should grow next week and lead stocks higher.

Stocks are highly correlated, so the investors haven't been picking the "right" stocks but only following the market trend.

It is obvious that Dax is trying to reach above March high and above 7200.

Dax trend 12.6.2012

Looks like Dax has probabilities for opening above 6200 tomorrow. Some of the indicators are already showing some strength, thus suggesting short term / intermediate term trend change.

Dax has been trading more and more riskier stocks. The indicator is currently just above 50 and usually this level has indicated higher levels for the index as well.

50 day cycle is obviously turning to uptrend in despite of bad news.

 Stock correlation is heading to lower levels and giving better opportunities for stock picking strategy.