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 15.3.2012

I am stucked with these few indicators, which have been very reliable lately.

Volume Index reached new highs again, which gives over 70% probability for continuation.

Here you can see the bullish and bearish scenarios for Volume Index.

McClellan Summation Index is indicating uptrend.

Dax sentiment week 51

Symmetrical triangle

Dax has been forming a symmetrical triangle. Now, we are waiting for a break out. This could be a little bit bearish, but I am not counting too much into that. Dax finally managed to get above 5767-5771 and yesterday it offered plausible support. So, if Dax cannot manage to break the declining trend line at 5890-5900 (or the upper at 6090) and begins to build a descending triangle, this would be bearish sign. This would be verified if Dax will re-test 5767-5771.

20 day highs vs. lows seems to be in a neutral zone. Thus, no trend here.

Currently 20 day stock performance is a slightly bearish, but when this indicator rises the odds for the bulls are also rising.

Again, overbought / oversold condition have no clue about the direction. No clear trend here either.

Dax cycles is also stucked at the neutral zero zone. However, it has made a lower low recently, which could indicate lower levels to the Dax. Apparently this could take 1-3 months.

 Same here with volume index which made lower lows. If the underlying situation is leading Dax and the politicians won't manage to manipulate the stock market, now it seems to be wise to trade in a triangle / range and wait the big move after the break out has occured.

According to Cognitrend sentiment studies, the optimism among Dax investors is at the highest level. Should I be concerned?

US money flow

Looks like the big players already placed their bets and currently are not accumulating any more.

Dax 16.9.2011

Seems like a rebound, finally

It doesn't matter if you are bear or bull, but prolonged situations get people bored. Now it seems that some people are tired of this pessimism.

My favorite indicator for buying and selling equilibrium reveals clearly that the bear camp is decreasing. Bulls need some more power to take index levels higher. We will watching the green line from below chart very closely. Usually these lines have quite much inertia, so it is very likely that we see them connecting each other, which means positive time for index.

 

The cycles indicator tells the same story.

Trin value is increasing, which is positive sign.

52-week new lows reached almost the same levels than during Lehmann collapse. Even the whole situation reminds the same. So, rebound, and it is still possible to see even new lows being tested.

Fewer and fewer stocks were dragging the index lower. Now it would be time for a broader based short term bull market.

I have been calling the rebound for some time now. This rebound could not have to do anything with real economy, but who cares. I hope that the investors could get more positive.

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.

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.