Market sentiment: "The burden of lost profits”
The indices are back where they were before the beginning of August, which should be particularly painful for investors on the sidelines. They now have to buy more expensively or have missed out on some gains. Which puts the market in a favorable situation, as Goldberg assumes.
Summary
German shares have fully recovered from the dip at the beginning of August. According to Joachim Goldberg, some medium-term investors regret having exited too early. Last week, 17 percent of professionals switched to the sidelines. Now 7 percent have returned to the short side, the psychologically easier position according to the behavioral economist. 3 percent have gone long. Sentiment falls to -6 points. Private investors, on the other hand, have improved. 4 percent have closed short positions, probably by necessity, and sentiment is quite high at +17 points.
Goldberg expects demand on the downside from 17,900/17,950 points from those who have missed the upward trend. On the upside, he sees little resistance from domestic investors. “The bottom line is that the sentiment situation for the DAX remains favorable.”
21 August 2024. FRANKFURT (Goldberg & Goldberg). However, only some of them (30 percent) have returned to the bull camp - understandably, as the significant upward movement since last Wednesday has hardly created any favorable entry opportunities. 70 percent of the previously neutral investors have apparently gone short in the rising market, which is psychologically easier.
Among private investors, sentiment has moved in the opposite direction. The Börse Frankfurt Sentiment Index for this panel has risen by 4 points to a new level of +17. At first glance, this is not a spectacular change either. However, a clear gap has opened up again between the private investors surveyed via social media and the other private investors. While the former are considerably more bullish compared to the previous week, this is not the case for the other panel participants, for whom a slight pessimism prevails, similar to that of institutional investors.
Difficult entry for optimists
However, only some of them (30 percent) have returned to the bull camp - understandably, as the significant upward movement since last Wednesday has hardly created any favorable entry opportunities. 70 percent of the formerly neutral players have apparently gone short in the rising market, which is psychologically easier.
Like a loss
With today's survey, the sentiment gap between private and institutional investors has widened again. It seems as if the latter have opened new short positions with a certain ease. On the other hand, new bullish commitments, combined with a (renewed) jump on the rising trend, are naturally not easy to manage mentally. Especially if you have already said goodbye to a larger bullish perspective and now have to come back to higher prices - a lost profit that feels like a loss that you do not want to realize.
Even if the Börse Frankfurt Sentiment Index of institutional investors is only slightly negative, demand from those who missed the upward trend is to be expected in the event of a setback. However, we do not expect this to increase until the 17,900/950 DAX points area. However, should additional demand emerge on the upside, particularly from long-term sources, domestic investors with a medium-term view would have little to counter this. All in all, the sentiment situation for the DAX therefore remains favorable.
By Joachim Goldberg
21 August, 2024, © Goldberg & Goldberg für boerse-frankfurt.de
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Sentiment-Index institutional investors
| Bullish | Bearish | Neutral | |
| Total | 35% | 41% | 24% |
| Compared to last survey | +3% | +7% | -10% |
DAX (compared to last survey): 17.850 (+370 compared to last week)
Börse Frankfurt Sentiment-Index institutional investors : -6 points (-4 compared to last week)
Sentiment-Index private investors
| Bullish | Bearish | Neutral | |
| Total | 48% | 31% | 21% |
| compared to last survey | unch. | -4% | +4% |
DAX (change compared to previous survey): 18.400 (+550 compared to previous week)
Frankfurt Stock Exchange Sentiment Index for private Investors: 17 points ( +4 points compared to previous week)
About the Börse Frankfurt Sentiment-Index
The Börse Frankfurt Sentiment Index ranges between -100 (total pessimism) and +100 (total optimism), with the transition from positive to negative values marking the neutral line.
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