Yesterday, we witnessed a 2,5% drop on the DAX within the course of 5 minutes. There wasn’t a single news story that explained the sudden drop, so conspiracy theories and rumors naturally had to surface. Surely it was a “robot” that had run amok, or was it the immanent downgrade of Germany, or (non-existing?) rockets fired at Eliat in Israel… Read more

Tags corrective waves - derivatives trading - dominant trends - market psychology - robot crash - sentiment volatility

There are times when market psychology is particularly sensitive to new information. You may create an edge for yourself by identifying when this is likely to happen. There’s of course no such thing as a free lunch, however some of you may be familiar with three day lunches…
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Tags cognitive dissonance - confirmation bias - crowd psychology - dax certificates - derivatives trading - dominant trends - institutional trader - market psychology - three day lunch - trading strategy

Since last week the DAX lost about 700 points, same with the DJIA. Could SentiTrade predict that this was about to happen? Our commentary over the last weeks gave plenty of clues and we’re pleased to note that our fully automated momentum strategies followed through. They apply a combination of the concept previously discussed, namely high/low marks from the SentiTrade indicator (trigger points) and momentum calculations of how quickly the sentiment is changing. Read more

Tags dax certificates - dax futures - derivatives trading - market prediction - market reversal - market sentiment - sentiment trigger point - sentiment volatility - system trading

The past 5 days we saw a gradual decline in market sentiment from 0.67 on June 30th to 0.55 on July 6th. In itself, the range between 0.67 and 0.55 is unspectacular because these values are close to a neutral range. Our review of more than 1.2 million news items over the past 6 years, identifies the average market sentiment value at 0.62 (financial journalists writing to a “long” oriented audience). Read more

Tags behavioral finance indicator - bull bear psychology - cognitive dissonance - crowd psychology - dax futures - derivatives trading - excessive investor optimism - investment strategy - market psychology - market sentiment - market trends - psychology trends - sentiment volatility - trading strategy

Being the largest European economy, the German DAX index rank among the most important markets in Europe. Trading takes place on the Frankfurt Stock Exchange and being fairly volatile, it is a popular certificate, options, futures and derivatives trading.  Also, a variety of index funds are available for short as well as long term investments. A DAX Index fund typically consists of widely-traded, high quality securities that are considered to be representative of the stock market as a whole. Read more

Tags dax certificates - dax futures - dax index fund - dax options - derivatives trading - safe investment - tax advantage