The pendulum swing near record highs is attracting many professionals to the short side. Joachim Goldberg knows what this could mean for stock prices.
The DAX has interrupted its long winning streak and fallen back slightly after reaching a new record high. The professional investors we surveyed responded to this movement with new short positions and stock sales. Fifteen percent moved to the bear side, 9 percent of them coming from the sidelines. However, Joachim Goldberg sees this as less a result of the continuing stream of bad news and more a case of profit-taking and attempts to profit from setbacks. The sentiment index fell to -15 points.
The behavioral economist considers the professionals on the short side to be a good support, which should kick in at 23,610/60 points at the latest. These further price gains could fuel an upward trend.
11 June, 2025. FRANKFURT (Goldberg & Goldberg). For the first time in nine weeks, the DAX has posted a loss – we are talking about one percent week-on-week since our last sentiment survey. However, it had previously reached a new all-time high slightly above the target range we last announced. Since then, prices have fallen slightly, although it is questionable whether the latest news from the US – which still dominates the headlines here – has contributed to this setback. Of course, the agreement on a preliminary plan to reduce trade tensions between the US and China could even be interpreted as positive for the financial markets, but since nothing concrete was apparent at the time of today's survey, it is not surprising that stock market traders in many places responded to the announced success of the talks in London with a shrug of the shoulders. Perhaps this is because, according to some commentators, many players are said to have a strange feeling in their stomachs, which could also be described as a subliminal fear, given the strong stock markets on both sides of the Atlantic and the predominantly negative news flow from the US.
Fear or reward?
Now, our latest sentiment survey among institutional investors with a medium-term trading horizon shows that, at least for a large proportion of those surveyed, their gut may have been “communicating” with their heads during the past few trading days, to put it bluntly. In some places, fear may have risen from the gut to the brain. At least, according to our Frankfurt Stock Exchange Sentiment Index, sentiment has deteriorated significantly compared to the previous week, falling by 21 points to a new level of -15. At the same time, the bear camp has increased by 15 percentage points. This increase consists of 60 percent formerly neutral investors and 40 percent former optimists who have turned their position 180° to “bearish.” However, it is by no means certain that the new commitments are merely fear-driven positions. After all, a very possible sale near last week's all-time high and the prospect of activating the reward system in the brain could also have motivated this decision, to stay with the metaphor.
Contrasting
The mood among private investors, on the other hand, remains almost unchanged. At least on the surface, our Frankfurt Stock Exchange Sentiment Index has only fallen by one point to a new level of +13 in this panel. But this apparent passivity is only apparent at first glance. In fact, a significant discrepancy has developed between those surveyed via social media and the remaining investors – the highest difference since the separate survey began in June 2023. While the former are significantly more positive than in the previous week, the remaining private investors, similar to institutional investors, have moved significantly toward the bear camp; in the end, both movements balanced each other out.
The bottom line is that the mood gap between private investors and institutional investors has widened compared to the previous week. However, if we exclude the private investors surveyed via social media, the mood in both panels is almost the same, but not extremely bad. Regardless of whether the recent short positions (especially among institutional investors) were taken out of fear or simply to generate extra performance from a setback, the latest sentiment development should be seen as support for the DAX should the stock market barometer come under more significant pressure. We expect initial strong demand in this case in the 23,610/60 range. The situation on the upside is also interesting if the fears prove to be unfounded, especially if fresh long-term demand, particularly from abroad, pushes the DAX back up again. It would not be surprising if the next run on the all-time highs were fueled by hastily made buybacks by today's pessimists. A short squeeze should come as no surprise in this context.
by Joachim Goldberg
11 June, 2025, © Goldberg & Goldberg for boerse-frankfurt.de
Bullish | Bearish | Neutral | |
Total | 33% | 48% | 19% |
vs. last survey | -6% | +15% | -9% |
DAX (change since last survey): 24,050 points (-250 points since last survey)
Frankfurt Stock Exchange Sentiment Index for institutional investors: -15 points (-21 points since last survey)
Bullish | Bearish | Neutral | |
Total | 46% | 33% | 21% |
vs. last survey | +0% | +1% | -1% |
DAX (change since last survey): 24,050 points (-250 points since last survey)
Frankfurt Stock Exchange Sentiment Index for private investors: +13 points (+0 points since last survey)
The Frankfurt Stock Exchange Sentiment Index ranges between -100 (total pessimism) and +100 (total optimism), with the transition from positive to negative values marking the neutral line.
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