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, Short-Term Stability Remains Elevated
The Dax posted a 0.3% gain on Tuesday, closing at 26,391.4 after trading between 26,245.6 and 26,504.5. Internal participation was mixed, with 46.2% of constituents advancing and 48.7% declining, while 2.6% reached new 52-week highs and none set new 52-week lows. Advancing stocks accounted for 60.9% of trading volume, indicating a tilt in turnover toward gainers despite the balanced breadth.
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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 persistence of the prevailing bullish structure. 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 ongoing uptrend, as advancing issues outpace decliners. The WSC Short-Term Trend Index reflects broad-based participation, with a high percentage of stocks trading above their 26-week highs. The market's close above the 50-day moving average, alongside a rising EMA 50 Line, further underscores the strength of the short-term TREND.
TREND QUALITY remains at its maximum, with the majority of stocks trading above both their 20-day and 50-day moving averages, indicating strong participation in the short-term rally. Upside-/Downside Volume Index Daily continues to show positive volume flows, while the Modified McClellan Oscillator Daily and Modified McClellan Volume Oscillator Daily both highlight 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, reinforcing the quality of the current uptrend.
SENTIMENT has moderated, with the score retreating to a neutral stance from the previous positive reading. While realized volatility over the past 10 days remains subdued, which is typically constructive, the CBOE Total Put-/Call Ratio Daily has turned bearish, signaling increased greed among market participants from a contrarian perspective. Other sentiment gauges, such as the 9-to-1 Up-/Down Days and the percentage of stocks with RSI(14) above 70 or below 30, remain neutral and did not materially influence the overall assessment.
Mid-term TREND indicators continue to signal a constructive environment, 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 moving average, with the EMA 100 Line still rising. These signals collectively point to a sustained and healthy mid-term uptrend, unchanged from the previous observation.
TREND QUALITY in the mid-term remains strong, as the majority of stocks are trading above their 100-day and 150-day moving averages, confirming widespread participation in the ongoing rally. The Modified McClellan Oscillator Weekly and Advance-/Decline Index Weekly both indicate that advancing stocks are outpacing decliners, while the Upside-/Downside Volume Index Weekly shows that volume is favoring advancing issues. Realized volatility over the past 20 days remains low, which is supportive of the current structure. The WSC Capitulation Index also reflects positive momentum in smart money flows.
SENTIMENT in the mid-term remains negative, though the score has edged higher versus the previous observation. The Smart Money Flow Index continues to show a lack of confirmation from institutional flows, and the WSC Capitulation Index FT maintains a negative outlook. The AAII Bulls & Bears Survey indicates heightened fear among individual investors, which could be interpreted as a contrarian positive, but overall, sentiment remains cautious. The Z-Score Put-/Call Ratio and Hindenburg Omen both remain neutral, with the latter shifting to neutral from its previous stance.
The Dax is positioned within a Structural Bull Market, as defined by persistently strong Long-Term Market Health. The current regime reflects a Very High Reward, Risk-On phase, underpinned by elevated Short-Term and Mid-Term Market Health. This environment has historically coincided with constructive conditions and a favorable risk backdrop.
Historically, since 1995 and across 351 samples, 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%, and the up-day rate is 57.9%.
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 tended to be positive, with the balance of evidence from current Short-Term and Mid-Term Market Health indicating a higher frequency of favorable returns over the next several weeks. Comparable phases have shown a clear tendency for positive outcomes to outnumber negative ones, though not without intermittent setbacks. The near-term outlook remains constructive, with historical patterns supporting ongoing participation.
The current combination of Short-Term and Mid-Term Market Health situates the regime as extremely stable, with a 98.25% probability of remaining in Risk-On territory over the next five trading days (Very High Reward 98.2%).
The historical pattern in this regime has favored maintaining or modestly increasing exposure, as the combination of strong market health and a Risk-On setting has rewarded ongoing participation. The bias has leaned toward allowing existing positions to run, with limited evidence for reducing risk at this stage.
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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