The current consolidation on the stock market had been announced for a long time.
(Photo: dpa)
Dusseldorf A special mood is spreading among investors these days: Relief and anticipation for the upcoming positive market phase – the year-end rally. This can be derived from the current data from the Handelsblatt survey Dax Sentiment and other indicators.
After the price gains last week, investors are waiting relaxed for the new direction. According to the sentiment data, however, there are no blatant sentiment imbalances that would make the market susceptible to one or the other direction.
Sentiment expert Stephan Heibel, who evaluates the survey for the Handelsblatt, sees the current situation as “a healthy market condition”. This does not rule out new setbacks, “but provides sufficient arguments to use possible setbacks for acquisitions”. Because there is still a high level of optimism for the future and the willingness to invest has even increased.
The reason: The several months of sideways trend between around 16,000 points on the top and 15,000 points on the bottom is intact again. The important difference: When the Dax was quoted at around 16,000 points, investors were very heavily invested. In the wake of the price declines since the beginning of September, the investment quota has decreased significantly to 14,818 points.
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Investors are relieved due to the latest price development. With the slide below the 15,000 mark, fears arose that the leading German index could slide into a prolonged bear market. That has not been confirmed. The willingness to buy was sufficiently high for a quick countermovement.
The relevant technical chart support also held. At the beginning of April, the Dax climbed above the 15,000 point mark for the first time in its history. The subsequent consolidation that followed caused the index to slide to 14,816 points – almost to the same level as the low of the recent decline.
This proximity to the lowest point since the 15,000 mark was conquered was reason enough for many investors to get back in business. “Now it seems that the stock markets have taken in enough air to break out north,” the sentiment expert assesses the current situation.
Current survey data
The past week of trading was positive overall. The leading German index rose by 2.8 percent during this period. The outlook is also promising: positive quarterly figures from the major US banks give hope for an overall positive reporting season.
Accordingly, investor sentiment jumped to 2.9. A week ago this value was minus 1.7, two weeks ago it was minus 4.7 Panic among investors – a very rapid change in sentiment within just two weeks.
Also the uncertainty of the previous week with a minus of 1.3 is gone. Complacency has risen to 1.0. There is still no sign of great complacency among investors. The current market situation is apparently still too fragile for that.
But the future expectation, the expected Dax direction in three months, remains continuously at a high level of currently 5.2. For six weeks, apart from a brief interruption, there has been extreme optimism about the future among investors.
And so the willingness to invest continues to rise. There has not been a current value of 3.8 since November last year.
The Euwax sentiment of the Stuttgart Stock Exchange, on which private investors trade, is listed with a value of two in the neutral range. So there is neither an overhang of call or put products in the depots. The conclusion can be drawn from this: private investors wait for the directional decision to be made before setting up their portfolio for the next market phase.
The put-call ratio of the Chicago futures exchange CBOE shows moderate hedging positions. US fund managers have reduced their investment ratio slightly to 64 percent. In a year-on-year comparison, they are rather underweighted at this rate.
The bulls have taken over the reins again among US private investors, with 38 percent expecting prices to rise. But the optimists are only slightly overweight. Because 32 percent still expect falling prices.
The “fear and greed indicator” of the US markets, calculated on the basis of technical market data, shows a neutral market condition with a value of 39 percent. Other short-term technical indicators for the S&P 500 are still in neutral territory but are on the verge of indicating an overheated market.
There are two assumptions behind surveys such as the Dax sentiment with more than 6,000 participants: If many investors are optimistic, they have already invested. Then there are only a few left who could still buy and thus drive prices up. Conversely, if investors are pessimistic, the majority of them have not invested. Then only a few can sell and thus depress prices.
Would you like to take part in the survey? Then you will be automatically informed about the start of the sentiment survey and sign up for the Dax Sentiment newsletter. The survey starts every Friday morning and ends on Sunday noon.
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