The DAX has fallen, but in Goldberg's view not enough to bring the many pessimists out of their loss zone. A good sign for bulls.
Even if it seems bigger in the media, the DAX has only fallen by 0.5 percent since last Wednesday. Local professionals have reacted to this with new positions. 5 percent have gone long, 2 percent short. The situation is different for private investors, 5 percent of whom have swapped long for short. The sentiment indicators are moving slightly towards each other at -26 and -2 points.
Joachim Goldberg assumes that the majority of professionals are still in a bad position and that the price declines were not enough. The behavioral economist sees the average purchase price of these investments at around 18,000 DAX points. This is where he expects to see the first major demand for shares. So the bottom line is that the positive starting position for further gains has not changed.
10 April 2024. FRANKFURT (Goldberg & Goldberg). The DAX has now taken a short break in its ascent. Overall, we have seen a setback of around 2.7% since the beginning of the quarter, starting from the previous all-time high. This means that this technical correction has reached an almost identical magnitude to the one at the beginning of the year - although it has only taken around half as long.
Even if one could get the impression at the end of last week in particular that the DAX was moving somewhat faster than usual in terms of setbacks, relatively significant recoveries also occurred time and again in between. This once again raised doubts as to whether the wish of the pessimistic majority of institutional investors for a temporary but significant fall in the DAX would actually be fulfilled. However, since our last sentiment survey, the DAX has again only fallen by a small 0.5%. This may also be due to the fact that important event risks (such as the inflation figures from the USA for the month of March, which are due to be published today, or tomorrow's meeting of the European Central Bank) are already casting their shadows.
Strong polarization
It is therefore not surprising that the sentiment of the institutional investors we surveyed with a medium-term trading horizon has not changed all that much, at least on the surface. Our Börse Frankfurt Sentiment Index climbed by just 3 points to a new level of -26. On closer inspection, however, it is noticeable that the polarization between bulls and bears has increased significantly, but asymmetrically. For example, the group of neutral investors has fallen by 7 percentage points - with the bull camp gaining just over 70% and the rest going to the bears. Nevertheless, institutional investors have not reduced their positions despite the aforementioned event risks.
We see a trend in the opposite direction among private investors, whose Börse Frankfurt Sentiment Index has also fallen: We note a decline of 10 points to a new level of -2. The bottom line there was a migration of 5 percent of all respondents away from the bull camp directly to the bear camp. It is striking that the change in sentiment is primarily attributable to private investors, whom we surveyed via social media and observed a very clear shift in opinion.
Caught pessimists
Overall, the sentiment gap between private and institutional investors has narrowed compared to the previous week. In relative terms over a three-month horizon, both panels are now roughly on a par; what they have in common is moderate pessimism - even in a six-month comparison, the differences are not too great.
Among institutional investors in particular, it is clear that at least a large proportion of pessimists cannot make too much of the DAX setback to date. This is not because the gains since the all-time high have not been attractive enough to be realized. Rather, we suspect that a good number of the pessimists from the past few weeks are still in loss territory with their own positions. The average purchase price of these exposures is probably around 18,000 DAX points, which is why we anticipate the first major demand from bearish sources in this area, which would then at least get out of their exposures without incurring losses.
All in all, the fundamentally positive sentiment situation of the DAX has not deteriorated compared to the previous week.
10 April 2024, © Goldberg & Goldberg für boerse-frankfurt.de
All interested investors are invited to participate. It takes only 15 seconds. Every Tuesday you will receive an e-mail with a survey link. You will receive the results of the analysis by e-mail.
Bullish | Bearish | Neutral | |
Total | 28% | 54% | 18% |
Compared to last survey | +5% | +2% | -7% |
DAX (Changes compared to previous survey): 18.200 (-100 to the previous week)
Börse Frankfurt Sentiment-Index for institutional investors: -26 points (+3 to the previous week)
Bullish | Bearish | Neutral | |
Total | 41% | 43% | 16% |
Compared to last survey | -5% | +5% | +0% |
DAX (Change compared to previous survey): 18.200 (-100 to the previous week)
Börse Frankfurt Sentiment-Index for private investors: -2 points(-10 points to the 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.
Time | Title |
---|