Global indexes and currencies

The latest bullish development with Western indexes has been a little bit weird, because the bullishness hasn't been reflected into other markets and risky assets.

EUR-USD has been pointing down. 

AUD-JPY has been struggling with upside resistance.

Hang Seng has been struggling with 61,8% Fibonacci resistance for a month.

Currently Dax is going  lose it's moment and to have a negative divergence with RSI, although this can be solved by having a positive day on Monday. 

The upcoming seasonality supports higher highs according that the next 4 weeks has historically been very bullish and April been the second best month in a year. 

Dax sentiment / technical analysis week 41

Up it is

Nothing much to say. The market is rising as expected. The bullish signs have been clear for couple of weeks now.

Dax overbought and oversold signals show clearly how the selling has decreased dramatically and buying has started to increase. The below graph show how the inertia between these two is currently on it's way to bring these into equilibrium. So, we expect higher high ahead for the index. After all, the seasonality is on bulls side for the rest of the year.

The below graph reveals the development of individual stocks compared to the index. As you can see, less and less stocks are performing better than the index, which is desirable outcome. The market is still working like it is supposed to work!!! Currently 40% of the stocks has performed better than the index during last 20 days. Usually this ratio could come down to 30%, at least, before the market will start to establish a short term top.

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.

Dax monthly seasonality

Investors waiting September anxiously


Historically September has been the worst performing and the most volatile month of the year for Dax.

Month	Prob.	Average %	Median %	Stdev
All	59,04 %	0,75 %	1,13 %	6,28 %
1	57,14 %	0,23 %	1,73 %	5,92 %
2	52,38 %	0,67 %	0,14 %	5,87 %
3	42,86 %	0,56 %	-0,04 %	4,89 %
4	76,19 %	3,88 %	3,33 %	6,68 %
5	57,14 %	0,66 %	1,38 %	4,54 %
6	52,38 %	0,04 %	0,02 %	4,76 %
7	52,38 %	1,05 %	0,01 %	7,23 %
8	52,38 %	-2,26 %	0,35 %	7,29 %
9	40,00 %	-3,12 %	-2,29 %	8,03 %
10	70,00 %	2,07 %	2,49 %	6,69 %
11	70,00 %	2,29 %	3,47 %	4,80 %
12	85,71 %	2,89 %	3,01 %	5,63 %