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.
Very High Reward Regime Holds, Early in Risk-On Phase
The Dax posted a marginal gain of 0.1% on Friday, closing at 25,629.2 after trading between 25,549.5 and 25,891.5. Despite the positive index performance, only 33.3% of constituents advanced while 66.7% declined, and advancing stocks accounted for 45.0% of total volume. New 52-week highs were limited to 5.1% of the index, with no stocks hitting new 52-week lows.
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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 robust, with the Trend Trader Index Lines showing both envelopes rising, confirming the ongoing strength of the short-term price trend. The market continues to trade above the upper envelope of the Trend Trader Index, and the Modified MACD maintains a positive momentum profile. The Advance-/Decline 20 Days Momentum also supports the bullish structure, as advancing issues outpace decliners. The WSC Short-Term Trend Index highlights broad-based participation, with a significant proportion of stocks trading above their 26-week highs. The market's close above the 50-day EMA, which itself is rising, further reinforces the constructive short-term TREND.
TREND QUALITY remains at its maximum reading, with the majority of stocks trading above both their 20-day and 50-day moving averages, underscoring strong participation in the prevailing uptrend. Upside-/Downside Volume Index Daily continues to reflect positive volume flows, while the Modified McClellan Oscillator Daily and Modified McClellan Volume Oscillator Daily both indicate that advancing stocks and volumes are outpacing their declining counterparts. The New Highs vs. New Lows Daily metric confirms that more stocks are reaching new yearly highs than lows, further validating the quality of the current short-term TREND.
SENTIMENT in the short-term horizon has shifted decisively, with the Sentiment Score advancing to a maximum reading. Realized Volatility (10d) has turned bullish versus the previous observation, now trading below its 25th percentile, which is typically interpreted as a supportive signal for risk assets. Other sentiment-related indicators, such as the CBOE Total Put-/Call Ratio Daily and the 9-to-1 Up-/Down Days, remain neutral and did not materially influence the overall assessment. Measures of extreme overbought or oversold conditions, such as the percentage of stocks with RSI(14) above 70 or below 30, also remain neutral.
Mid-term TREND indicators continue to reflect a strong and persistent uptrend, with the WSC Trend Index showing a broad base of stocks trading above their 52-week highs. The WSC Mid-Term Price Trend remains bullish, and the market has closed above its 100-day EMA, which is itself rising. The majority of stocks are also trading above their 100-day and 150-day moving averages, confirming the underlying strength of the mid-term TREND.
TREND QUALITY in the mid-term horizon remains robust, as evidenced by the Modified McClellan Oscillator Weekly and Advance-/Decline Index Weekly, both of which indicate that advancing stocks and issues are outpacing decliners. Upside-/Downside Volume Index Weekly continues to show healthy demand, with advancing volume outstripping declining volume. Realized Volatility (20d) is trading below its 25th percentile, which is a constructive signal for the quality of the ongoing uptrend. The WSC Capitulation Index and its FT variant both reflect positive momentum in smart money flows, further supporting the quality of the mid-term TREND.
SENTIMENT in the mid-term horizon remains neutral, with no significant change from the previous observation. The Hindenburg Omen remains a point of caution, as its recent trigger suggests increased downside risk within a 30-day window due to weak market breadth. The Smart Money Flow Index is not confirming the current market level, and the AAII Bulls & Bears Survey continues to signal elevated fear among individual investors. The Z-Score Put-/Call Ratio remains neutral, and these mixed signals temper the otherwise positive technical backdrop.
The Dax is positioned within a Structural Bull Market, as defined by persistently strong Long-Term Market Health. The current regime reflects the most constructive tier in the framework, with both Short-Term and Mid-Term Market Health holding at elevated levels. This backdrop supports a Risk-On environment, with the market still in the early stages of its current phase.
Historically, this regime has delivered an annualized return of +44.7% with a Sharpe of 3.10, roughly three times the buy-and-hold baseline of +14.0%, at meaningfully lower volatility. Average maximum drawdown stands at -1.36%, with an up-day rate of 57.9% across 351 samples since 1995.
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.
Very High Reward| Market Regime | Zeitanteil | Episoden | Rendite p.a. | Positive Tage | Ø positiver Tag | Ø negativer Tag | Volatilität | Sharpe |
|---|---|---|---|---|---|---|---|---|
| Risk-On · 63.3% der Zeit | ||||||||
| Very High Reward | 52.0% | 351 | 44.7% | 57.9% | 0.7% | -0.6% | 14.4% | 3.10 |
| High Reward | 5.2% | 140 | 45.3% | 56.2% | 0.9% | -0.8% | 17.9% | 2.52 |
| Increasing Reward | 6.1% | 91 | 64.6% | 57.1% | 1.3% | -1.2% | 27.2% | 2.37 |
| Risk-Off · 36.7% der Zeit | ||||||||
| Increasing Risk | 15.5% | 358 | -22.4% | 49.1% | 0.9% | -1.0% | 19.4% | -1.16 |
| High Risk | 7.4% | 235 | -16.0% | 50.1% | 1.0% | -1.1% | 23.2% | -0.69 |
| Very High Risk | 13.8% | 158 | -44.0% | 45.7% | 1.6% | -1.7% | 37.3% | -1.18 |
| Benchmark · Buy & Hold | ||||||||
| All Periods | 100.0% | n/a | 14.0% | 54.5% | 0.9% | -0.9% | 21.4% | 0.66 |
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 outcomes have historically favored positive returns more often than negative ones when both Short-Term and Mid-Term Market Health are this elevated. While the pattern is not uniformly strong across all short horizons, the balance of evidence points to a constructive near-term outlook. Comparable phases have typically seen a modest but consistent tilt toward upside participation over the next several weeks.
The current combination of Short-Term and Mid-Term Market Health situates the regime in an extremely stable state, with a 99.1% probability of remaining in Risk-On territory over the next five trading days (Very High Reward 99.1%).
The historical pattern in this regime has favored maintaining or incrementally increasing exposure. Participation has generally been rewarded, with the bias leaning toward ongoing engagement rather than defensive repositioning.
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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