Dax indicators 11.4.2012

Current rebound could go as high as 6850-6860 without breaking the downtrend in RSI.

But most of the stocks are already below their 50 day averages.

MSI is pointing down and still staying at quite high level.

Overbought and sold conditions have easened from their extremes and almost converged. Before the relation is inversed there is potential that index would stay low or decline more.

But seems like investors want to take a little bit more risk currently, so at least we saw short term market bottom.

The selling volume hasn't been special

Volume index hasn't made any new lows.

TRIN was temporarily positive, so the investors were buying advancing stocks (obviously when almost all the stocks were rising...).

Dax indicators 4.4.2012

Dax closed with 30 declining stocks measured from close and 30 declining measured from open. Averagely there are about 4 similar cases during year. Statistically this hasn't been very good sign for the next day. There is 86% chance (average -1.86%) that we close lower than 6784. 6.3.2012 we closed only 0,57% higher, so if the day will be up, the potential is limited. Yesterday's trading signals suggested to short FRE and FME, because usually high beta stocks lead up if we will see strong rebound.

Dax hourly chart looks bullish with DMIs at the extreme levels, RSI and MACD going to point up.

However, in a longer perspective Volume Index has dropped more aggressively than the prices...

...and here you can see how the prices behave when Volume Index has fresh 20 day low.

Investor risk appetite has been dropping since the middle of March.

Stocks have broken their 50 day moving average quite quickly.

20 day performance still seems surprisingly positive, but it is expected to change. 

Dax cycle is going down. Would it finish the down cycle this time? 

McClellan Summation Index is also in a downtrend.

Dax RSI indicator indicates that the index has had stronger downside momentum than the actual stocks. According to my studies, we could have a tradable market bottom for longer term swing traders within a month.

Dax should have upper target near 6870-6880, but it would be great opportunity to add some short positions. The downside target could be 6750, and pessimistic target 6658.

Dax indicators 2.4.2012

Yesterday was a very bullish day. We saw only 4 stocks declining from their opening.

We got 6 fresh 52 week highs with ADS, BEI, DPW, HEN3, LIN, MAN, MRKK. 

16 stocks are less than -10% from their 52 week highs and averagely gain from 52 week low is 42,1 %.

Looking at 3 month performance we notice that thr are already few stocks trading on the negative side.

Dax cycles is still anticipating more down ahead...

...and so does McClellan Summation Index.

Dax Volume Index doesn't have any meaningful divergence with prices.

Technically Dax can climb to touch the declining trend line at 6129. Even if it does that, there is still negative divergence with MACD and RSI. Breaking above the trend line should also break the divergences.

Dax technicals 1.3.2010

Dax has a important resistance at 6990. Now when S&P500 is facing resistance, Dax hasn't been able to make higher high since 21.2.2012. MACD and RSI diverge negatively from index.

More and more stocks are making lower lows and 20 day lows.

38% of the stocks are currently performing better than the index. However, decline of this ratio is actually bullish for the index, even it also indicates upcoming short term top.

Dax cycles indicator has been making lower lows for a while.

McClellan Summation Index has been making lower lows for a while.

15 companies are less than -10% from their 52 week highs while just 1 company is less than 10% from it's 52 week low.

Dax volume index has still negative divergence with prices. Should this be corrected soon or will it continue to diverge more?

Prices seem to stay high without any good reason or bad news to sell. In despite of that Greece 1 year bond yield is at the absurd level 951% and the country has been downgraded to selective default. Officials still argue no to default?

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.