Some are reacting to the new all-time highs with short positions that were previously on the sidelines. All in all, this could be helpful for further gains.
German shares, as measured by the DAX, are reaching new highs, as are other international share indices. The more medium-term oriented investors we surveyed are reacting with short positions. 11 percent of professionals and 3 percent of private investors have switched to the bear side, while 3 percent each have sold shares. Joachim Goldberg assumes that long-term capital is driving prices, or that the positions of the local players were small.
The sentiment indices stand at +3 and +18, which the behavioral economist sees as neutral. This increases the chances of further price increases. In his opinion, the new pessimists are likely to close out their positions at the first major setback from 16,100 and 16,150 points. And on the upside, a short squeeze could even provide further impetus.
6. Dezember 2023. FRANKFURT (Goldberg & Goldberg). A nice present: just in time for St. Nicholas Day, the DAX actually managed to climb to a new all-time high. Many players may well have rubbed their eyes in amazement that the stock market barometer was able to go one better after the strong run-up in November - there were quite a few voices expressing doubts about this. On the other hand, however, it can be said that - judging by our sentiment surveys in the run-up to the event - the stock market players were best prepared this time, in contrast to the previous three all-time highs that had already been reached in the course of the year. Of course, the development of bond yields in the US and the now increasingly priced-in interest rate cuts by the US Federal Reserve in the coming year played into the hands of the equity bulls.
If you look at the change in sentiment among the institutional investors with a medium-term trading horizon that we surveyed, you could almost think that, in view of the DAX's new all-time high, some wanted to make sure that, figuratively speaking, their Santa Claus boots were not only well filled in theory, but also in reality. Our Börse Frankfurt Sentiment Index has fallen by 14 points to a new level of +3. So while the DAX produced a weekly gain for the fifth time in a row, sentiment, as measured by the Börse Frankfurt Sentiment Index, has not improved at any point over the past four weeks.
Tempted
However, it should be noted that the bull camp has only shrunk by 3 percentage points, meaning that the number of those who have realized gains has remained manageable. After all, almost all of the former bulls have gone straight to the bears, i.e. turned their positions around 180°. However, almost three quarters of the 11 percentage point increase in the bear camp can be traced back to previously neutral players, who were lured out of the reserve by the DAX's significant weekly rise of around 2.8% on a point comparison and the tempting opportunity to go short even at the DAX's record high.
Our Börse Frankfurt Sentiment Index also fell among private investors, albeit to a much lesser extent than among their institutional counterparts. We recorded a decline of 6 points to a new level of +18. 3 percent of all respondents moved directly from the bull to the bear side.
No significant setback
With today's survey, the gap between private and institutional investors has widened again in terms of sentiment. Simply because the latter had a greater urge to try their hand at being bears once again. It is noteworthy that the DAX has not produced any significant setbacks since last Wednesday despite these recent declines. It is possible that the DAX has also benefited from long-term capital inflows. Or were the volumes of the recent pessimists just modest?
In the end, DAX sentiment moved towards the neutral line and is already in negative territory over the past three months. This means that the sentiment environment for the DAX remains favorable and has even improved slightly compared to the previous week. This is because the recent pessimists are likely to cover their investments again at the first major setback (possibly between 16,100 and 16,150 points). And if this does not materialize at all, a short squeeze may even be on the cards if the exposure is large enough.
6. Dezember 2023, © Goldberg & Goldberg für boerse-frankfurt.de
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Bullish | Bearish | Neutral | |
Total | 38% | 35% | 27% |
To previous week | -3% | +11% | -8% |
DAX (change to previous week): 16.550 (+440 to previous week)
Börse Frankfurt Sentiment Index of institutional investors: +3 points (-14 to previous week)
Bullish | Bearish | Neutral | |
Total | 51% | 33% | 16% |
To previous week | -3% | +3% | unchg. |
DAX (change to previous week): 16.550 (+440 to previous week)
Börse Frankfurt Sentiment Index private investors: +18 points (-6 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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