Dax and trades 21.5.2012

The market is acting as expected. Let's watch this rebound if it is an intermediate term trend turn or just a bear market rally. Overbought and oversold condition is seemingly easening and indicating a nearing bottom. Anyway, Dax could rebound at least over 6400, perhaps 6544 is a decent target.

Dax and risk cycle was already at reasonable level to indicate at least short term trend change.

Check also the other indicators.

LONG: DAX, DCX, CBK, DBK, HEID, SAP, LIN. SHORT: FRE, FME.

Few indicators

23% of Dax stocks are still above their 50 day moving average.

Last week we wrote that the stock correlation is in uptrend. Watch out carefully, because diversification doesn't help if it gets too high.

No signs of a bottoming process yet. We need sellers to calm down and more buyers.

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Bearish dax 9.5.2012

Volume Index has been leading the way down. It already went below 27.10.2011 highs, which I have to read careful since it can indicate lower lows for Dax.

It also seems that the sellers haven't been satisfied yet.

The indicators with daily updated close values can also be found here.

Dax update 26.4.

The variation between stocks has diverged lately, thus giving good stock picking opportunities.

Correlation between index and stocks has been quite high and recently lowering a little bit. I hope it will lower more. If the correlation is very high, it is somehow alerting, because usually correlation rises near or during downtrends.

Risk indicator is already quite high, so there could be 1-3 days consolidation ahead.

Oversold condition easened, but we need to watch this careful.

Trading performance has been quite pleasant lately even the increased positions has caused more volatility.

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 10.4.2012

Even the short term market bottom could be near I still have 3 different algos pointing to have an open short position for Dax.

Dax cycles down.

Dax beta down. 

Dax overbought vs. oversold converging.

Dax 20 day performance down.

Dax RSI down.

Dax indicators 20.3.2012

Dax still has a negative divergence with RSI and MACD, which could make momentum investors cautious. Break below 6970 would confirm the divergence and lead Dax to 6600. If Dax manages to stay high, 7400 maintains as an intermediate target.

Volume index has been rising and almost climbed above July highs. We need to watch this carefully for a hint of level 7400 for Dax.

Overbought - oversold indicator resisted it's normal inertia which would have taken Dax to lower levels. Now we are back in uptrend.

 Dax 20 day highs vs. lows also indicates uptrend.

McClellan Summation Index indicates uptrend.

The only negative indication is investor beta, which is currently indicating risk aversion even it is still above positive level 50.

Overview: We haven't had any major negative news issue lately, so remain cautiously positive and bullish biased.

Dax technicals 13.3.2012

Buyers have calmed, but sellers are not very enthusiastic. Overbought condition has been easening lately, but we can still see no sellers. However, topping process may last months. 

McClellan Summation Index is trying to return into uptrend. That's why yesterday's trade was to buy low beta stocks.

In a technical perspective, Dax is facing heavy resistance at 6976-6990. This is a third time to test this resistance. If we get some really surprising positive news and get above the resistance, Dax could climb to 7400. If it fails and falls below 6621, then the low target should be around 6270-6300.

Dax statistics 20.2.2012

Not much to say, but wait

Long term view is bullish as long as stocks are making new highs. We haven't seen new lows for a while. 

Long term bullish view can be changed into bearish if we  see new lows in a future, but there are only few stocks near their 52-week lows. Averagely Dax stocks have risen 46.41% from their lowest levels. Averagely stocks are -15.16% from their highest points. There are 15 stocks less than -7% from their highs.

Blue chips have been leading the latest advance in stocks. Technology and small caps have been lagging.

So far investors have pushed all the Dax stocks above their 50 day moving averages. This kind of condition hasn't been very common in the history.

Oversold condition is literally at zero, even the overbought condition has loosened a bit.

McClellan Summation Index again started to point higher levels after temporary decline.

Dax Volume Index has been lagging during the whole rally, which indicates investors haven't totally been interested to participate.

Global stock market looks clearly that US has been leading the rally up. Nasdaq and S&P500 are already on the positive track annually while others are lagging. We can at least conclude that FED programs are doing well.

I have been calling a top many times lately, and now I cannot do anything but wait. There are few options how the overbought condition usually fades away: condsolidation, small pullback, correction.

Dax weekly sentiment 44

Dax has found some resistance

From technical perspective it seems that after completing the upside targets, Dax has found resistance around level 6400. In a future Dax could be consolidating/ranging between 6000-6400.

Overbought/sold indicator has reached extreme level after selling has dropped dramatically. It doesn't need any extra efforts to forecast this to reverse in a future.

Dax cycles indicates that we don't have much room for the upside, so we will see a consolidation or a pullback.

20 day high vs. low ratio is also in a extreme overbought condition. Usually this high level has marked at least a short term top.

90% of Dax stocks are 1 standard deviation above their 50 day and 20 day moving averages. Again we are in a very overbought condition that won't last long.

Dax volume index led the price index up and now it has confirmed the current level. No divergence at the moment.

Dax sentiment week 42

Higher close ahead

Dax has traveled couple of weeks and tried to break-up through 6000. Anyway, the technical upside target has remain the same even the road has been quite choppy.

One of the most reliable indicators for short term cycles has been overbought/sold indicator calculated from invidual stocks. The indicator and the inertia didn't fail when the equilibrium was reached, and the index surged like it was expected to do. 

Cycles indicator has surged to positive level, which is short term bullish signal.

Dax TRIN indicator has been peaking high numbers which indicates contrarians aggressive buying.

 Dax Volume index made higher high compared to the beginning of 2010. Thus, it is expected the index to close also higher than 6048.

20 day relative performance of individual stocks compared to index has also decreased to below 40%, which was expected. If this is a rebound, this ratio should start to surge around 30%. Then it is time to be less aggressive bull.

Overall, the market psychology still works as it should. Buy when everyone is selling, but try to buy at the bottom. And sell at the top. Now we are waiting the top.