Dax sentiment week 1

Europe bearish, US bullish

It seems that US investors have been trying to push the stocks up, otherwise Europeans would have dragged the market down. Also Asians have been in a bearish mood lately. It seems that there are more bearish signals than bullish even the market hasn't wanted to decline, yet.

Dax McClellan indicator is currently at level zero, which would be nice touch if we want to have a turning point here.

Advancing stocks minus declining stocks turned negative.

Dax McClellan oscillator is way too high! Haven't seen this high level for ages.

20 day stock performance has been building up negative divergence. Normally this high level would mean short term market bottom, but this doesn't look like a bottom. So, it seems that Dax should decline a little bit to have a real market bottom.

Volume index hasn't followed the advance in prices. Even the price index made high levels, the volume is waiting the prices to decline. 

Dax sentiment week 39

Positive signs

We have seen some positive signs lately on last days. Opening gap on thursday, statistically positive day on Friday, and continuation of these bullish patterns on Monday. On Monday, we already saw the first crossover of 50 day moving average when Fresenius Medical Care reached it's 20-day high. After 29.7. all Dax stocks have traded below 50-day moving average.

Although, Beiersdorf and Fresenius SE dropped to new 20-day lows, the technical signs have been more positive than negative. 30 percent of Dax stocks are already above their 20-day highs, which seems bullish for short term.

Indicator for measuring oversold - and bought is still in quite extreme condition, since buying is yet lagging. The expectation is, that the condition will recover to the balance. When green buying will began to show more positive development, the price index (Dax) could quite quickly recover to higher levels. Anyway, we still need a few positive news to have the impact.

Seasonality is bullish biased for the end of the year. Last four weeks have been negative biased since 1990, and the probability for positive week has been about 40%. The seasonality for the rest of the year gives hope for bullish investors.

The average returns have been more positive for the rest of the year.

The volume index, based on invidual stock volumes, seems to be syncronised with price index. As you can see from the aboce graph, volume index began to show negative divergence already in last May making lower highs and lower lows. At the same time the price index (Dax) was trading in a range. Recently the volume index hasn't dropped below the level of June 2009.

Technical indicators are showing positive divergence for short term, especially RSI. Daily chart gave positive signals last thursday (exhaustion gap), friday (hammer candlestick), and monday (bullish continuation). However, long term picture is negative because of negative and downtrending TRIX and MACD.