Dax indicators 28.3.2012

Yesterday's call for a rebound canceled. It is not wise to try catch a falling knife at this point. There are evidences that we will see lower lows and lower close ahead. 

Dax volume indicator trying to lead the prices down.

It is always bearish when Accumulation/Distribution falls into negative territory...

...combined with investor's reduced willingness to take risk it almost guaranteed that Dax will have lower close during next 5 days.   

Dax Cycle is trying to point down.

McClellan Summation Index is already bearish.

The most important level tomorrow is 6974 and 7050. Below those levels we remain bearish and keep 6600 as our 5 day target.

Today Dax could climb above 7000 (target 7016), but eventually fall below 6900 (target 6895).

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 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.

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.

Dax 4.8.2011

Extreme condition


27 of 30 dax stocks are trading their 20-day lows. We haven't seen greater amount than this, so we expect a pullback of some kind.

Accumulation/Distribution reveals very very oversold condition. In history, we have seen quite strong short term rebound from such state.

Our own dax indicator also reveals very high oversold condition which we have seen previously during 2008 bear market. We could see +5-10% rebound during next 2 months.

Trin SMA(10) reveals interestingly weakening down-trend.

16 of 30 stocks are trading better than the underlying index. We are expecting a tradable bottom soon.

Cumulated volume index hasn't made new lows even the price index has.

Dax 3.8.2011

Individual stocks 1-year performance seems controversial.













Accumulation/Distribution based on the individual stock performance of underlying index suggests very oversold condition.













Another volume based index, Arms Index a.k.a. TRIN, also reveals very oversold condition.













Over 80% of dax companies are trading near their 20-day lows. This suggests good opportinity to short term rebound, or that the short term bottom is near.