With prices falling slightly, a number of investors have also switched back to short. They are going against the actual trend, as Goldberg recognizes. And wait for buying opportunities.
The slowdown in German blue chips is also reflected in market sentiment. Local investors have turned from long to short. 7% of professionals have sold and are now bearish, as have 2% and 3% of private investors. The sentiment indicators fall to -29 and +8 points and are thus quite far apart.
Joachim Goldberg recognizes a pattern of behaviour that he has seen since the beginning of this year: "Despite an unbroken upward trend so far, the decision of choice is not to participate in this trend, but to hold against it". This is also the case today. The behavioral economist believes that many of the pessimists are waiting for a setback and expects demand from 18,000 DAX points. The sentiment situation for German blue chips therefore remains robust.
3 April 2024. FRANKFURT (Goldberg & Goldberg). As expected, the shortened trading week due to Easter only resulted in a trading range of around 1.6% for the DAX. However, it is interesting to note that this range was completely crossed on a single trading day, namely yesterday. The start of the new quarter is somewhat reminiscent of the beginning of 2024. This time, a new all-time high was even reached at the beginning before the setback of the aforementioned magnitude occurred. And at the time of the survey, there was also a drop of 0.7% for the first time in six weeks. Above all, however, the statisticians wondered whether the DAX would be able to continue its strong performance during the first three months of this year in the coming weeks. However: There were quite a few analysts and commentators who were rather skeptical about an unchecked continuation of the DAX's upward trend.
The majority of the institutional investors we surveyed with a medium-term trading horizon also seem to have doubts about a continuation of the DAX's upward trend. As measured by our Börse Frankfurt Sentiment Index, sentiment collapsed at the beginning of the quarter - we recorded a decline of 14 points to a new level of -29. The fact that the index is now at its second-lowest level this year is due to a migration that on balance reduced the bull camp by 7 percentage points. As the bears increased by the same amount, it can be assumed that the bullish positions behind the change in sentiment were turned 180° directly to the bear side.
Betting on corrections
The trend among private investors was similar, albeit to a much lesser extent. The Börse Frankfurt Sentiment Index in this panel fell by 5 points to a new level of +8. Here, too, the bull camp has shrunk, although a third of those willing to switch have moved to the sidelines. Remarkable in this context: the sentiment among the participants surveyed via social media is considerably better than among other private investors.
With today's survey, the sentiment gap between private and institutional investors has widened significantly again. Among the latter in particular, we are observing similar sentiment behavior to that seen at the beginning of the year, when the Sentiment Index was at its lowest level to date. In a relative comparison with the surveys since the beginning of the year, however, the sentiment situation is nowhere near as dramatic as the absolute figures suggest. However, we are registering the lowest level to date here.
Gone to come back
Even if we suspect that the pessimistic majority of institutional investors do not believe in a sustainable trend reversal in the DAX, the typical pattern of behavior that we have seen since the beginning of this year is still evident: Despite an unbroken upward trend so far, the decision of choice is not to participate in this trend, but to hold against it. This is shown by the 14 sentiment surveys conducted so far this year, only one of which had a positive sign.
Ultimately, the outcome of today's survey is also an indication that many of the pessimists would probably be happy to finally see a setback - the biggest so far this year was around 2.8% - in order to make up some ground in terms of performance. Demand (buybacks) from these sources is probably to be expected for the first time around the 18,000 DAX mark. Demand that helps the DAX in the event of setbacks and ultimately means that the sentiment situation of the stock market barometer can still be classified as robust.
3 April 2024, © Goldberg & Goldberg für boerse-frankfurt.de
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Bullish | Bearish | Neutral | |
Total | 23% | 52% | 25% |
Compared to last survey | -7% | +7% | +0% |
DAX (Change compared to previous survey): 18.300 (-120 to the previous week)
Börse Frankfurt Sentiment-Index for institutional investors: -29 points(-14 to the previous week)
Bullish | Bearish | Neutral | |
Total | 46% | 38% | 16% |
Compared to last survey | -2% | +3% | -1% |
DAX (Change compared to previous survey): 18.300 (-120 to the previous week)
Börse Frankfurt Sentiment-Index for private investors: +8 points(-5 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.
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