Despite strong DAX levels, professionals remain cautious, while private investors show stable optimism. According to Goldberg, this is a positive scenario for further price gains.
Despite new record highs, Joachim Goldberg considers the general mood to be rather subdued. Local, medium-term oriented professionals also remain predominantly skeptical. Those who are long remain in, but 13 percent have switched from the sidelines to the short side. Sentiment falls to -19 points. Private investors, on the other hand, remain bullish with a sentiment index of +23 points.
The behavioral economist sees the changes just below 17,000 and, as before, suspects that the bears could act as demand between 16,550 and 16,600 points. On the DAX upside, the bears should get into a decent squeeze in the event of further price rises.
7 February 2024. FRANKFURT (Goldberg & Goldberg). Despite several event risks that the equity markets have had to deal with since our last sentiment survey, the DAX has remained surprisingly quiet. Although the most important events have taken place in the USA - think of the new findings from the meeting of the Federal Open Market Committee of the US Federal Reserve or the labor market report there - it is still astonishing that the DAX's trading range of 1.3% last week was the narrowest so far this year. Even the move above the 17,000 mark, which was accompanied by a new all-time high, was not accompanied by any fanfare, for example in the form of larger stop-loss orders. Instead of the unbridled optimism currently being invoked by commentators in some quarters, the price trend of the past few days seems to indicate a more cautious stance on the part of stock market players. This is astonishing, given that the players on the financial markets, at least in the USA, are supposedly still expecting falling inflation and - albeit possibly with a delay of a few months - falling interest rates and rising economic growth.
No sign of euphoria
But not only some commentators are currently skeptical. The institutional investors with a medium-term trading horizon that we surveyed also seem to distrust the current stable state of the stock market. Our Börse Frankfurt Sentiment Index has fallen by 13 points to a new level of -19. The bear camp has grown by 13 percentage points, an increase that is almost entirely attributable to previously neutral investors. The latter group now only accounts for 15% of all respondents and is therefore at the lower end of the scale, even in the longer term.
By contrast, sentiment among private investors has once again moved in a different direction. Their Börse Frankfurt Sentiment Index has strengthened for the fourth time in a row - this time by 6 points to a new level of +23. In this panel, it was a group of bears who threw in the towel and presumably also switched directly to the bull side in view of the DAX once again exceeding 17,000 points.
Waiting for the correction
As a result, the sentiment gap between private and institutional investors has widened once again. While the former are becoming more optimistic from week to week, the majority of institutional counterparts, whose share of bulls has remained unchanged compared to the previous week, appear to have gone short for the third time in this still young year. This may have happened at prices just below 17,000 in the hope that the DAX will not make any headway on the upside. Interestingly, the stock market barometer did not fall despite these renewed losses and even posted a mini gain of 0.1% on the week.
We continue to assume that not only the new bears from today will cover their positions again in the event of a DAX setback. In this respect, we consider the range between 16,550 and 16,600 points to be a good demand level. However, if the hoped-for correction is slow to materialize, buying interest may arise even at higher levels.
Meanwhile, the topside of the DAX has also become interesting, as the size of the short positions from the past two weeks has now reached a level that could lead to a decent squeeze in the event of further price rises - provided the bears are forced to give up.
All in all, the sentiment situation for the DAX has not deteriorated compared to the previous week.
7 February 2024, © Goldberg & Goldberg für boerse-frankfurt.de
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Bullish | Bearish | Neutral | |
Total | 33% | 52% | 15% |
To previous week | unchg. | +13% | -13% |
DAX (change to previous week): 17.000 (+20 to previous week)
Börse Frankfurt Sentiment Index of institutional investors: -18 points (-13 to previous week)
Bullish | Bearish | Neutral | |
Total | 53% | 30% | 17% |
To previous week | +3% | -3% | unchg. |
DAX (change to previous week): 17.000 (+20 to previous week)
Börse Frankfurt Sentiment Index private investors: +23 point (+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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