Dax · DAX · Europe
The daily data-driven DAX analysis: where the DAX stands, how Trend, Breadth and Investor Sentiment define the current Market Regime, and how comparable setups have unfolded since 1995.
Risk-Off Phase Starts, Near-Term Health Deteriorates Sharply
The Dax posted a 0.2% gain on Friday, closing at 26,046.4 after trading between 25,958.7 and 26,167.9. Market breadth was positive, with 59.0% of constituents advancing and 41.0% declining, while 5.1% reached new 52-week highs and none set new 52-week lows. Advancing stocks accounted for 67.2% of total volume, indicating stronger participation on the upside.
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A compact analysis of the DAX indicators: Trend, Trend Quality (Breadth), and Sentiment across the short- and mid-term horizon, including Smart Money and Dumb Money positioning.
Short-term TREND indicators remain under pressure, with the Trend Trader Index showing the market trading below its lower envelope line based on the 20-day rolling low, confirming a bearish short-term price structure. Both envelope lines of the Trend Trader Index are declining, which further underscores the deterioration in short-term price action. The Modified MACD continues to signal negative momentum, and the Advance-/Decline 20 Days Momentum reflects a negative bias as declining issues outpace advancing ones. While the market closed above its 50-day moving average and the EMA 50 Line is rising, these positives are outweighed by the persistent weakness in the short-term trend structure. The WSC Short-Term Trend Index suggests some breadth, but the overall short-term TREND remains challenged.
Short-term TREND QUALITY has weakened, slipping from its previous reading, as several key indicators have shifted to a more cautious stance. The Percentage of Stocks Above 20-Day MA turned bearish versus the previous observation, with most stocks now trading below this threshold, signaling a loss of short-term participation. The Modified McClellan Oscillator Daily and Modified McClellan Volume Oscillator Daily both indicate that the momentum of declining stocks and volume is outpacing advancing counterparts, further eroding the quality of the short-term trend. Realized Volatility in % (10d) is now above its 75th percentile, which is a negative development for trend stability. Other indicators, such as the CBOE Total Put-/Call Ratio Daily and 9-to-1 Up-/Down Days, remain neutral and do not materially influence the overall assessment.
Short-term SENTIMENT remains negative, with no improvement from the previous observation. The market continues to see a lack of positive sentiment signals, as evidenced by the absence of extreme overbought or oversold conditions in the Percentage of Stocks with RSI(14) above 70 or below 30. Upside-/Downside Volume Index Daily is positive, indicating some constructive volume flows, and New Highs vs. New Lows Daily shows more stocks hitting new yearly highs than lows, but these positives are not sufficient to offset the broader negative sentiment backdrop. The overall tone remains cautious, with risk appetite subdued in the short-term horizon.
Mid-term TREND indicators remain robust, with the WSC Trend Index confirming a broad-based advance as a significant proportion of stocks trade above their 52-week highs. The WSC Mid-Term Price Trend continues to signal a bullish environment, and the market remains firmly above its 100-day moving average, with the EMA 100 Line still rising. The Percentage of Stocks Above 100-Day MA and 150-Day MA both indicate strong participation, reinforcing the positive mid-term price structure. There has been no deterioration in these core trend signals versus the previous observation.
Mid-term TREND QUALITY remains at a maximum reading, unchanged from the prior session, as underlying breadth and momentum indicators continue to support the prevailing uptrend. The Modified McClellan Oscillator Weekly and Advance-/Decline Index Weekly both show advancing stocks outpacing decliners, while the Upside-/Downside Volume Index Weekly confirms healthy demand through superior volume in advancing issues. Realized Volatility in % (20d) is trading below its 25th percentile, which is a constructive signal for trend stability. The AAII Bulls & Bears Survey turned bullish versus the previous day, further supporting the quality of the mid-term trend. However, some caution is warranted as the Smart Money Flow Index and both WSC Capitulation Index readings remain negative, indicating a lack of confirmation from institutional flows.
Mid-term SENTIMENT remains negative, with no improvement from the previous observation. Despite the strong technical backdrop, the Smart Money Flow Index and WSC Capitulation Index both continue to signal a lack of conviction from institutional investors. The AAII Bulls & Bears Survey is supportive, but this is offset by the persistent negative signals from smart money indicators. Other sentiment measures, such as the Z-Score Put-/Call Ratio and Hindenburg Omen, remain neutral and do not materially influence the overall assessment. The divergence between strong technicals and weak sentiment persists.
The Dax is positioned within a Structural Bull Market, as defined by persistently strong Long-Term Market Health. Despite this robust strategic backdrop, the current regime has shifted to Increasing Risk, reflecting a deterioration in Short-Term Market Health even as Mid-Term Market Health remains elevated. This marks a transition to a Risk-Off phase, with near-term caution prevailing despite the underlying long-term strength.
Historically, since 1995, this regime has delivered an annualized return of -22.7% with a Sharpe ratio of -1.17, compared to a buy-and-hold baseline of +14.4% per year and a Sharpe of 0.67. Volatility has been broadly similar to buy-and-hold, while the average maximum drawdown stands at -0.93%. The up-day rate is 49.0%, based on a sample of 360 observations.
Historische Rendite des DAX je Marktphase: die Entwicklung der sechs Market Regimes seit 1995 im Vergleich zur Buy-and-Hold-Benchmark. Die aktuelle Marktphase ist als Aktiv gekennzeichnet.
Increasing Risk| Market Regime | Zeitanteil | Episoden | Rendite p.a. | Positive Tage | Ø positiver Tag | Ø negativer Tag | Volatilität | Sharpe |
|---|---|---|---|---|---|---|---|---|
| Risk-On · 63.4% der Zeit | ||||||||
| Very High Reward | 52.1% | 351 | 44.6% | 57.9% | 0.7% | -0.6% | 14.4% | 3.10 |
| High Reward | 5.1% | 139 | 44.3% | 56.8% | 0.9% | -0.8% | 18.2% | 2.43 |
| Increasing Reward | 6.2% | 96 | 67.6% | 57.1% | 1.3% | -1.2% | 27.0% | 2.50 |
| Risk-Off · 36.6% der Zeit | ||||||||
| Increasing Risk | 15.4% | 360 | -22.7% | 49.0% | 0.9% | -1.0% | 19.4% | -1.17 |
| High Risk | 7.3% | 233 | -7.8% | 51.0% | 1.0% | -1.1% | 23.1% | -0.34 |
| Very High Risk | 13.9% | 156 | -44.8% | 45.6% | 1.6% | -1.7% | 37.1% | -1.21 |
| Benchmark · Buy & Hold | ||||||||
| All Periods | 100.0% | n/a | 14.4% | 54.5% | 0.9% | -0.9% | 21.3% | 0.67 |
Returns annualized; up-day share, average daily returns, volatility and Sharpe Ratio based on historical daily data since 1995. Past performance is no guide to future results.
Short-Term and Mid-Term Market Health scores indicate that, historically, comparable phases have delivered a favorable pattern of outcomes over the next day, week, and month. Positive returns have occurred more frequently than negative ones in these windows, with the historical pattern showing a clear bias toward constructive short-term performance. The near-term outlook remains positive, even as the regime signals increased caution.
The current combination of Short-Term and Mid-Term Market Health situates the regime as moderately stable, with a 59.8% probability of remaining in Risk-Off territory over the next five trading days (Increasing Risk 58.5%, High Risk 1.2%).
The historical pattern in this regime has favored maintaining exposure rather than reducing risk outright. While the Risk-Off label warrants vigilance, the bias has leaned toward ongoing participation given the constructive short-term return profile.
WallStreetCourier publishes end-of-day research on the DAX every trading day. With a free Basic account you get full access to one market every week: Daily Morning Briefing, Market Regime Research, Market Health and the complete Indicator Dashboard.
See This Week's Free Market →The current classification is shown at the top of this page and is updated after the close on every trading day. It is based on the DAX Market Regime, the market phase derived from trend, market breadth and investor sentiment. Instead of price targets, the analysis shows how the DAX has performed in comparable conditions since 1995. The freely available report is published with a delay; members receive it on the day of publication.
The answer is provided by the six-level scale at the top of this page. The upper three levels (Risk-On) indicate a constructive, broadly bullish environment, the lower three (Risk-Off) a defensive, broadly bearish environment. In addition, the long-term Market Health Score, a measure of market health from 0 to 100, shows whether the DAX is trading in a bull or bear market on a structural level: readings of 50 and above indicate a bull market, readings below 50 a bear market.
Nobody can predict that with certainty. Instead, Chapter 04 shows the probability that the current market phase of the DAX has persisted or shifted in comparable historical conditions since 1995. This provides a statistical expectation for the coming trading days, not price targets.
The long-term outlook is derived from the structural market status and historical statistics: Chapter 04 shows how often the DAX was trading higher twelve months after comparable market phases and what the average development looked like. This is a probability-based assessment built on data since 1995, not a prediction.
Indications are provided by the sentiment indicators in Chapter 02, including the positioning of Smart Money and Dumb Money, meaning institutional and retail investors. Extreme euphoria has historically served as a warning signal, while extreme fear often acts as a contrarian indicator. The current state of investor sentiment is published on every trading day.
No. Classic forecasts provide price targets and chart levels. Instead, this page determines the current market phase of the DAX on every trading day based on trend, market breadth and investor sentiment, and shows how comparable phases have developed since 1995. Probabilities instead of price targets: that is the data-driven form of an outlook.
A Market Regime describes where a market stands as of the latest close on a six-level scale, from Very High Reward to Very High Risk. The upper three levels are considered Risk-On, the lower three Risk-Off. The classification describes the risk-reward environment the DAX is trading in, not a price target.
Market Health is a measure of the market's condition: a composite score from 0 to 100, calculated separately for the short-, medium- and long-term horizon. It combines three dimensions: Trend shows whether the market is moving up, down or sideways. Market breadth (Trend Quality) measures how many stocks are actually participating in the move. Sentiment captures investor mood, including the positioning of Smart Money and Dumb Money. Readings above 50 indicate a constructive environment.
Risk-On comprises the three constructive Market Regimes Very High Reward, High Reward and Increasing Reward. Risk-Off comprises Increasing Risk, High Risk and Very High Risk. This distinction matters because the six Market Regimes have developed very differently over three decades. The table above shows, for each Market Regime since 1995, the annualized return, the share of positive days, the volatility and the Sharpe Ratio compared to the buy-and-hold benchmark.
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No. WallStreetCourier publishes quantitative market research for informational purposes. It describes current market conditions but does not provide recommendations to act. The historical performance of a Market Regime is not a reliable indicator of future results.
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