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, Regime Stability Remains High
The Dax retreated by 1.1% on Tuesday, closing at 25,970.1 after opening at 26,150.8 and trading within a range defined by a high of 26,206.1 and a low of 25,916.8. Market breadth was notably negative, with only 23.1% of constituents advancing and 74.4% declining, while 79.4% of trading volume was concentrated in declining stocks. No stocks reached new 52-week highs, and 2.6% registered new 52-week lows, underscoring the broad-based weakness in the index.
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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 deteriorated notably versus the previous observation, with the Trend Trader Index signaling a shift to a bearish stance as the market traded below the lower envelope line based on the 20-day rolling low. The Modified MACD also turned bearish, reflecting negative momentum in the short-term price trend. The Advance-/Decline 20 Days Momentum weakened, now indicating that declining issues are outpacing advancing ones, and the WSC Short-Term Trend Index turned bearish as fewer stocks are trading above their 26-week highs. Despite these negatives, the market remains above its 50 EMA, and the EMA 50 Line continues to rise, suggesting some underlying resilience in the short-term price structure.
TREND QUALITY in the short-term weakened materially, as evidenced by the downside shift in several breadth and momentum indicators. The Upside-/Downside Volume Index Daily turned bearish, with volume flows now favoring declining stocks. Both the Modified McClellan Oscillator Daily and the Modified McClellan Volume Oscillator Daily turned bearish, indicating that the momentum of declining stocks and volume is now outpacing that of advancing ones. The New Highs vs. New Lows Daily metric also confirms a deterioration, with more stocks hitting new yearly lows than highs. However, the Percentage of Stocks Above 20-Day and 50-Day MA remains supportive, as the majority of constituents still trade above these key moving averages, providing a degree of offset to the otherwise negative breadth signals.
SENTIMENT indicators moderated from a previously positive stance to a more neutral reading. The CBOE Total Put-/Call Ratio Daily remained neutral, suggesting a balanced options market without excessive hedging or speculation. Realized Volatility in % (10d) shifted to neutral, indicating that short-term volatility is neither excessively high nor low. The 9-to-1 Up-/Down Days metric also stayed neutral, reflecting a lack of extreme institutional buying or selling. Additionally, the Percentage of Stocks with RSI(14) above 70 and below 30 both remained neutral, signaling the absence of widespread overbought or oversold conditions. Overall, SENTIMENT is no longer a tailwind for the short-term outlook.
Mid-term TREND indicators held firm at robust levels, with the WSC Trend Index continuing to show a broad-based advance as a high percentage of stocks remain above their 52-week highs. The WSC Mid-Term Price Trend remains bullish, and the market closed above its 100 EMA, with the EMA 100 Line still rising. These signals collectively confirm that the underlying mid-term price trend remains intact and constructive, unchanged from the previous observation.
TREND QUALITY in the mid-term remains exceptionally strong, with the Percentage of Stocks Above 100-Day and 150-Day MA both indicating that the majority of index constituents are trading above these key moving averages. The Modified McClellan Oscillator Weekly continues to show that advancing stocks are outpacing decliners, while the Advance-/Decline Index Weekly and Upside-/Downside Volume Index Weekly both confirm healthy participation and demand. Realized Volatility in % (20d) remains subdued, trading below its 25th percentile, which is supportive for the ongoing trend. The WSC Capitulation Index also signals positive momentum in smart money flows, reinforcing the quality of the current mid-term advance.
SENTIMENT in the mid-term remains a point of caution, with the Smart Money Flow Index not confirming the current market level and the WSC Capitulation Index FT reflecting a negative outlook from smart money participants. The AAII Bulls & Bears Survey continues to indicate elevated bearishness among individual investors, suggesting persistent skepticism about the market's prospects. Other sentiment-related indicators, such as the Z-Score Put-/Call Ratio and the Hindenburg Omen, remain neutral and do not materially influence the overall assessment. As a result, SENTIMENT continues to act as a headwind for the mid-term outlook.
The Dax is positioned within a Structural Bull Market, as defined by persistently strong Long-Term Market Health. The current regime reflects an Increasing Risk phase, with Short-Term Market Health notably weak while Mid-Term Market Health remains elevated. This divergence signals a tactical Risk-Off environment, even as the broader structural backdrop remains supportive.
Historically, this regime has delivered an annualized return of -22.6% with a Sharpe of -1.16, against a buy-and-hold baseline of +14.4% per year. Volatility is broadly similar to buy-and-hold, while the average maximum drawdown stands at -0.93%. The up-day rate is 49.1%. The historical sample covers 359 episodes 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.
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 | 52.2% | 350 | 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% | 359 | -22.6% | 49.1% | 0.9% | -1.0% | 19.4% | -1.16 |
| 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% | 0.68 |
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 been mixed in similar regimes, with positive and negative sessions occurring at roughly comparable rates. The current combination of weak Short-Term Market Health and strong Mid-Term Market Health suggests that near-term returns may lack clear directional conviction. While the longer-term context remains constructive, the immediate outlook is characterized by heightened uncertainty and a diminished frequency of sustained advances.
The current combination of Short-Term and Mid-Term Market Health situates the regime in a stable state, with a 77.3% probability of remaining in Risk-Off territory over the next five trading days (Increasing Risk 77.3%).
The historical pattern in this regime has favored a cautious approach to positioning, with a bias toward reducing exposure or avoiding aggressive allocation shifts. Participation has generally been less rewarded during comparable phases, and the prevailing bias has leaned toward defensive positioning until near-term conditions improve.
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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