The market, as well as investors here, remain calm to bullish - although in Goldberg's view, optimism in this situation could function as a contra-indicator, i.e. put the brakes on.
Despite the difficult news situation, the stock market remains stable, German blue chips have even risen again by some since last Wednesday. Also the optimism of the local investors with medium-term time horizon holds. 4 percent of the professionals have sold. Joachim Goldberg suspects that the DAX plus has turned out too low for stronger profit taking. He sees many depots of the professional bulls still under water. Among the private with 4 percent, some bears would have taken the profits from their short positions. Both sentiment indices remain on the sunny side at +29 and +19 points.
The behavioral economist sees the optimism overall still as a burden for a "free ride to the top". From 15,450/500 points, he expects further closes, or sales, also at 15,650. And the bottom is no longer well secured below 15,100/150, he said.
11 October 2023. FRANKFURT (Goldberg & Goldberg). Even if one might think that the terrible war in the Middle East and the multitude of possible outcomes associated with it on the geopolitical stage should have shifted the focus of market participants, stock market players on both sides of the Atlantic seem to have long since returned to other priorities. Especially since the latest comments by some representatives of the Federal Open Market Committee of the U.S. Federal Reserve have revived hopes that the Fed might initially refrain from further interest rate hikes in the fight against inflation.
At first glance, at least, one could argue that the significant drop in bond yields since last Friday has also given wings to the DAX. After all, despite all the geopolitical risks, the stock market barometer has risen by almost 3 percent at times since our last sentiment survey - most of which has also been retained in the weekly cut-off date analysis.
In the end, the DAX reached the sell-off zone for institutional investors (15,450/500) that we had forecast, with the exception of a few points. This may also have been the reason why only a few optimists have so far turned their backs on the DAX: Because our Börse Frankfurt Sentiment Index of medium-term oriented investors has declined by only 4 points to a new level of +25. In fact, on balance, there has also only been profit-taking by previously bullish players in the order of 4 percent of all respondents. In any case, it is interesting to note that hardly anyone has ventured directly to the short side.
Nobody wants to go short
Among private investors, there has been a development in the opposite direction, so that the Börse Frankfurt Sentiment Index of this panel has risen by 4 points to a new level of +23. Here, too, there has been only profit-taking, albeit by former pessimists, but hardly any position changes directly from "bearish" to "bullish".
With today's survey, the sentiment gap between private and institutional investors has narrowed to 2 sentiment points. At first glance, of course, it is remarkable that positive sentiment among institutional investors has declined only slightly. In other words: Has the DAX gain since our last survey been too low to provoke profit-taking by institutional investors? Or is it possibly even a case of sustained optimism?
Legacy positions weigh
In any case, it should not be forgotten that many of the bullish exposures that have been in place for several weeks have been significantly underwater in the meantime, and that many of the affected players have not yet seen their former cost prices again in order to get out of these positions, at least without incurring a loss.
Overall, today's sentiment survey makes it clear that the optimism of individual investors is still too high to ensure the DAX free ride to the top. This is because there is still a threat of supply as a result of profit-taking or liquidations from bullish positions in the area around 15,450/500, but also at the level of 15,650 points. In any case, there is little to suggest that investors are actually leaving larger book profits on the table. At the same time, the downside, especially below 15,100/150, is not well protected.
11 October 2023, © Goldberg & Goldberg for boerse-frankfurt.de
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Bullish | Bearish | Neutral | |
Total | 54% | 29% | 17% |
To previous week | -4% | unch. | +4% |
DAX (change to previous week): 15.400 (+400 to previous week)
Börse Frankfurt Sentiment Index of institutional investors: 25 points (-4 to previous week)
Bullish | Bearish | Neutral | |
Total | 52% | 29% | 19% |
To previous week | unchg. | -4% | +4% |
DAX (change to previous week): 15.400 (+400 to previous week)
Börse Frankfurt Sentiment Index private investors: +23 points (+4 to previous week)
The Börse Frankfurt Sentiment Index ranges between -100 (total pessimism) and +100 (total optimism), the transition from positive to negative values marks the neutral line.
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