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 Score Hits Peak
The Dax advanced 0.5% on Friday, closing at 26,440.3 after trading between 26,405.0 and 26,541.3. Market breadth was moderately positive, with 53.8% of constituents rising and 43.6% declining, while 5.1% reached new 52-week highs and none set new 52-week lows. However, advancing stocks accounted for only 35.8% of total volume, compared to 61.2% for decliners, indicating that the day’s gains were supported by a narrower base of trading activity.
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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.
The Trend Trader Index continues to reflect a robust short-term price trend, with the market trading above the upper envelope line based on the 20-day rolling high. Both envelope lines of the Trend Trader Index Lines remain in a rising configuration, confirming that the structural short-term price trend is intact. The Modified MACD sustains its positive momentum, and the Advance-/Decline 20 Days Momentum shows advancing issues outpacing decliners, reinforcing the bullish tone. The WSC Short-Term Trend Index highlights broad-based participation, as a significant proportion of stocks are trading above their 26-week highs. The market also remains firmly above its 50-day moving average, with the EMA 50 Line continuing to rise, underscoring the strength of the prevailing trend. No deterioration or reversal was observed versus the previous session.
Short-term TREND QUALITY remains exceptionally strong, as evidenced by the majority of stocks trading above both their 20-day and 50-day moving averages. This breadth is further supported by the Upside-/Downside Volume Index Daily, which continues to show positive volume flows into equities. 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 uptrend. No material change in TREND QUALITY was observed compared to the previous observation.
Short-term SENTIMENT remains constructive, with realized volatility over the past 10 days trading below its 25th percentile, which is typically interpreted as a positive signal for risk appetite. The CBOE Total Put-/Call Ratio Daily, 9-to-1 Up-/Down Days, and the percentage of stocks with RSI(14) above 70 or below 30 all remain neutral, suggesting that neither excessive optimism nor pessimism is present at this juncture. The absence of extreme readings in these sentiment gauges supports the sustainability of the current short-term rally. SENTIMENT indicators are unchanged from the previous session, maintaining a positive backdrop.
Mid-term TREND indicators continue to reflect 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 confirm that the mid-term price trend is well-supported and has not faltered since the previous observation.
TREND QUALITY in the mid-term remains robust, as the majority of stocks are trading above both their 100-day and 150-day moving averages. The Modified McClellan Oscillator Weekly and Advance-/Decline Index Weekly both indicate that advancing stocks and issues are outpacing decliners, while the Upside-/Downside Volume Index Weekly shows healthy demand with advancing volume leading. Realized volatility over the past 20 days is still below its 25th percentile, which is a constructive sign for trend durability. The WSC Capitulation Index also continues to reflect positive momentum in smart money flows, further supporting the quality of the mid-term trend.
Mid-term SENTIMENT remains a point of caution, with the Smart Money Flow Index not confirming the current market level and the WSC Capitulation Index FT maintaining a negative outlook. The AAII Bulls & Bears Survey continues to register elevated bearishness among individual investors, indicating persistent skepticism about the market’s prospects over the next six months. Other sentiment measures, such as the Z-Score Put-/Call Ratio and the Hindenburg Omen, remain neutral and do not materially influence the overall assessment. SENTIMENT has not improved versus the previous observation and continues to warrant monitoring.
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 levels in both Short-Term and Mid-Term Market Health. This environment has historically coincided with constructive conditions and a favorable risk backdrop.
Historically, since 1995, this regime has delivered an annualized return of +44.7% with a Sharpe ratio 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% across 351 historical samples.
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 comparable phases indicating a higher frequency of gains over the next several sessions. The current readings in Short-Term and Mid-Term Market Health support a constructive outlook, with historical patterns showing that positive returns have been more common than negative ones on both weekly and monthly horizons. While day-to-day results can be mixed, the overall short-term tone remains favorable.
The current combination of Short-Term and Mid-Term Market Health situates the regime as extremely stable, with a 100.0% probability of remaining in Risk-On territory over the next five trading days (Very High Reward 100.0%).
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 typically rewarded ongoing participation. The bias has leaned toward allowing positions to run, rather than reducing risk or rotating defensively.
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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