Dusseldorf Many investors are currently looking for short setbacks on the stock market in order to be able to get in or buy more and to benefit from the ongoing rally. This is shown by the data of the Handelsblatt survey Dax-Sentiment. Although the optimism about the future signals a more wait-and-see attitude, the willingness to invest has increased significantly.
This behavior is easy to explain. The setback on January 19, when the Dax fell by around 250 points to 14,906 points, was neither high nor long enough to give investors who were keen to invest the chance to get started.
Since then, the prices have risen again continuously with minor fluctuations. In the past week there was an increase of 0.7 percent.
Now many investors are obviously hoping for another significant setback in order to be able to get in after all. “They often wait in vain,” says sentiment expert Stephan Heibel, who evaluates and interprets the Handelsblatt survey. The course of trading on Monday, which has meanwhile caused the Dax to slip to 14,988 points, may not have been sufficient for many new purchases.
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Overall, however, the sentiment values do not show any blatant misallocation that could lead to problems. The situation is completely different with the Euwax sentiment of the Stuttgart Stock Exchange. This indicator shows an extremely high hedging position of private investors. This behavior leads to early buying in the event of setbacks, so the German stock market has a stable safety net.
However, if prices continue to climb steadily and with little volatility, these hedging positions could come under pressure at some point. If they are then unwound, the rally will be fueled further – not only via the short-buying, but also as the previously underinvested investors chase the rising prices. The rule is that the longer there is no significant price decline, the greater the pressure on hedging positions.
Accordingly, Heibel says: “It stands by my statement from the previous week: The potential for surprises is on the top.”
Current survey data
Investor sentiment has brightened moderately in parallel with the rising prices. After a value of 1.1 points in the previous week, the investor sentiment at 1.9 points currently signals a good mood among investors.
Self-satisfaction also shows moderate satisfaction with a value of 0.7 points (previous week 0.8 points).
For the future, on the other hand, things are not looking so rosy: the future expectation has dropped to 0.4 points. In the previous week, this value was still 1.5 points. As a result, the bull camp (who are betting on rising prices) is visibly emptying, while at the same time the bear camp (who expect falling prices) remains unchanged. Obviously, investors are gathering in the neutral camp and are waiting for a directional decision.
However, the willingness to invest increases to 1.8 points after 0.8 points in the previous week. Many investors obviously see an opportunity in a possible price setback.
The Euwax sentiment of the Stuttgart Stock Exchange, where private investors trade, has fallen to minus 17, the lowest value since the Corona crash. Private investors obviously fear a sharp fall in prices and protect themselves against falling prices with appropriate products.
Institutional investors who hedge themselves with options via the Frankfurt derivatives exchange Eurex have a put/call ratio of 2.8, which also signals a strong interest in put protection. During the week, the put/call ratio was already at seven, which is similar to the put/call ratio just before the pullback ten days ago. The put/call ratio on the Chicago futures exchange CBOE is declining, signaling a decreasing need for hedging on the part of US investors.
US fund investors have increased their investment ratio to 75 percent. This means that they have reached the highest level of investment in the last ten months. In the long term, this value is back in a normal range.
The bull-bear difference for US private investors is minus nine. 37 percent bears versus 28 percent bulls. In contrast to Germany, the bear camp in the USA is still the largest camp and even larger than the neutral camp. The “fear and greed indicator” of the US markets, calculated using technical market data, shows moderate greed with a value of 68 percent.
Different sentiment on the gold market
The mood on the gold market looks different to the stock market. There, the expectation of a future rally has died out. Sentiment plummets, although the price of gold is able to hold its high level. Future expectations have been falling continuously for six weeks and, according to data from the analysis company Animusx, reached a negative extreme level at the weekend.
For Heibel, this opens up the possibility that the gold price will continue to maintain its good performance of the past few months and continue to climb in the coming weeks.
As late as mid-January, after a plus of 15 percent in three months, the mood had signaled a breather as the most likely scenario for the next one to two weeks. Since then, the price of gold has remained at the same level.
There are two assumptions behind surveys such as the Dax sentiment with more than 7,800 participants: if many investors are optimistic, they have already invested. Then only a few are 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 the courses.
Do you want to take part in the survey? Then let yourself be informed automatically about the start of the sentiment survey and register for the Dax sentiment newsletter. The survey starts every Friday morning and ends on Sunday afternoon.
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