State of Dax - Calendar Week 28

Today's post is about the state of Germany's leading stock index, DAX (sometimes also called DAX30 or GER30).

We're trying to determine the health of DAX 30 by looking at the DAX Advance Decline Line, Dax McClellan Oscillator, Dax McClellan Summation Index and the Dax members above their SMA50, SMA100 and SMA200.

 

Dax Advance Decline Line and Advanced vs. Declined

The image above shows the historical data of Dax along with the Dax Advance Decline Line and the Advanced vs. Declined graph.

Along with the price, the Advance Decline data decreased this week. There is still no warning signal for a big correction since there is no divergence in Advance Decline Line vs. Dax and the Advanced vs. Declined data is still in normal range. At the moment, this looks like the price's movement sticks within the range we've seen during the last 6-7 weeks and the advance decline data follows those upside-downs.

However, the current situation should be monitored closely by short-term traders.

McClellan Oscillator and McClellan Summation Index for DAX

The McClellan Oscillator for Dax continues to not show any clear direction.

The McClellan Summation Index for Dax stopped the movement towards the zero line, but as of now this isn't a warn signal. Anti-cyclical traders could try to speculate for a small chance here (long). However, note that both McClellan indicators still mirror the fact that we are seeing a sideways trend at the moment.

Dax members above their SMA50, SMA100 and SMA200

 

During the last trading week, the number of Dax members above their SMA50 declind again to a value below 50%. This just confirms that on the short time frame, there is no upwards trend. 

The number of Dax members above their SMA100 declined from ~53% to ~ 45%.

No clear warn signal here, but also no reason given to be euphoric.

A stability signal can still be seen in the fact that 80% of the Dax members are still above their SMA 200. We've seen a small decline here, but nothing to worry about - yet.

Let me undermine this statement with another graphic:

Since end of March 2021, the number of Dax members above their SMA200 was at or above the 80% level. During the last months, the 80% mark was touched 6 times, including during the last trading day. For me, breaking this 80% mark would give a small bearish signal. This is the reason why we have breadth data and look at the bigger picture - to see an indication where the index could be going, at the 80% mark in this graph is our pulse sensor. As long as we are above this mark, I would stay optimistic.

Summary

No clear signals from the Advance Decline data, we're still in the sideways trend and are currently seeing the middle/lower regions of this range.

However, the percentage of Dax members above their SMA 200 should not break the 80% mark, because this clearly would be something we haven't seen in months. While this would not be a strong bearish signal, it could give a little indication that the Dax will decline for a couple of days or weeks before getting stronger again.

Just my opinion, and please member, I am not a professional analyst.