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.
Short-Term Risk-Off Regime Proves Extremely Stable, Scores Lag
The Dax advanced 0.5% on Wednesday, closing at 25,537.8, with 66.7% of its constituents posting gains and 54.7% of trading volume concentrated in advancing stocks; only 2.6% of components registered new 52-week lows, while no stocks reached new 52-week highs.
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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 signaling a bearish environment as the market continues to trade below the lower envelope line based on the 20-day rolling low. Both envelope lines of the Trend Trader Index Lines are declining, underscoring the damaged structure of the short-term price trend. The Modified MACD confirms negative momentum, while the Advance-/Decline 20 Days Momentum also points to a deteriorating trend, as declining issues outpace advancing ones. The WSC Short-Term Trend Index highlights that a limited percentage of stocks are trading above their 26-week highs, reinforcing the bearish tone. The market remains below its 50-day moving average, and the EMA 50 Line continues to rise, but this is insufficient to offset the prevailing weakness.
TREND QUALITY remains deeply negative, as the majority of stocks within the index are trading below both their 20-day and 50-day moving averages, indicating poor participation in any potential rebound. The Upside-/Downside Volume Index Daily shows that volume flows are skewed to the downside, and both the Modified McClellan Oscillator Daily and Modified McClellan Volume Oscillator Daily confirm that declining stocks and volume are outpacing advancing ones. New Highs vs. New Lows Daily continues to show more stocks hitting new yearly lows than highs, further highlighting the lack of breadth and confirming the fragile short-term structure.
SENTIMENT has shifted to a more neutral stance, as evidenced by the Sentiment Score moving to 50.00 from zero previously. The CBOE Total Put-/Call Ratio Daily remains neutral, suggesting that options market participants are not expressing a strong directional bias. Realized Volatility in % (10d) and the 9-to-1 Up-/Down Days both shifted to neutral, indicating a pause in extreme institutional activity and volatility. Additionally, the percentage of stocks with RSI(14) above 70 or below 30 remains neutral, suggesting neither overbought nor oversold conditions are prevalent at this time.
Mid-term TREND indicators continue to present a constructive backdrop, with the WSC Mid-Term Price Trend confirming a bullish trajectory. The market remains above its 100-day moving average, and the EMA 100 Line is still rising, both of which reinforce the positive mid-term trend. However, the WSC Trend Index highlights a note of caution, as the percentage of stocks trading above their 52-week highs remains subdued, suggesting that while the index level is strong, underlying participation is less robust.
TREND QUALITY in the mid-term remains strong, supported by the majority of stocks trading above their 100-day and 150-day moving averages, as indicated by the respective participation rates. The Modified McClellan Oscillator Weekly continues to show that advancing stocks are outpacing decliners, and the Upside-/Downside Volume Index Weekly confirms that volume is favoring advancing stocks, indicating healthy demand. However, the Advance-/Decline Index Weekly turned bearish versus the previous trading day, signaling that declining issues are now outpacing advancing ones, which introduces a degree of vulnerability to the tape.
SENTIMENT remains negative in the mid-term, with the AAII Bulls & Bears Survey showing an increase in bearish sentiment among individual investors, which turned more cautious versus the previous observation. The WSC Capitulation Index continues to indicate negative momentum in smart money flows, even as the WSC Capitulation Index FT suggests a more positive outlook from smart money overall. Other sentiment-related indicators, such as the Z-Score Put-/Call Ratio, Realized Volatility in % (20d), Hindenburg Omen, and Smart Money Flow Index, remain neutral and do not materially influence the current assessment.
Dax trades within a Structural Bull Market as defined by Long-Term Market Health, with the current regime classified as Increasing Risk. This regime reflects a pronounced divergence between a strong long-term foundation and a sharp deterioration in Short-Term Market Health, while Mid-Term Market Health remains supportive. The near-term environment is Risk-Off, with mixed levels across horizons.
Historically, this regime has delivered an annualized return of -22.7% with a Sharpe of -1.17, 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 49.0%. These results are based on a sample of 360 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 | 52.1% | 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 a muted near-term outlook. Historically, comparable phases have produced a higher frequency of negative outcomes, with downside events more common than positive ones over the next several weeks. The short-term pattern does not favor a constructive stance, and the risk of further drawdown remains elevated.
The current combination of Short-Term and Mid-Term Market Health places the regime in an extremely stable state. The probability of remaining in Risk-Off territory over the next five trading days is 97.0% (Increasing Risk 89.9%, High Risk 5.9%, Very High Risk 1.2%).
The historical pattern in this regime has favored reducing exposure and adopting a defensive posture. The bias has leaned toward limiting risk rather than seeking incremental gains.
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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A free Basic account provides full access to one market every week: Daily Morning Briefing, Market Regime Research, Market Health and the complete Indicator Dashboard. The freely available market changes every Saturday. No credit card is required.
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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