close icon

DAX 30 Surged 50%+ in Three Months. Here is Why

THIS WEEK ONLY, in addition to the seven premium instruments, all our subscribers will receive ONE Elliott Wave analysis of DAX 30 as a BONUS. Subscribe NOW and get yours on Sunday, June 14th.

The last time we wrote about the German DAX 30, the index was in a free fall. It was March 2nd and the coronavirus selloff was in full swing. The price was collapsing. Fortunately, Elliott Wave analysis helped us anticipate the crash without even taking COVID-19’s impact on the economy into account. The plunge continued for a couple more weeks until it touched 8256 on March 16th.

What followed could hardly be predicted by looking at the information available on the news. New virus cases and deaths in Europe were surging every day. Governments were imposing total lockdowns on entire districts. Businesses were shutting their doors and laying people off indefinitely. Economies were stopped in their tracks. Yet, the German DAX 30 started climbing.

Ahead of the DAX 30 Surge with Elliott Wave analysis

As of this writing, things are still very far from getting back to normal. Q2 is expected to see the worst GDP decline on record. However, the DAX reached 12 913 this week, up 56% from the March bottom.

Although the German index is not among our seven premium instruments, we do have several clients who receive DAX 30 analysis on-demand. Below is a chart we sent to them on March 23rd. It shows that ignoring the news can often lead to better returns in the financial markets.

DAX 30 sat the stage for an Elliott Wave surge in March

A week before the end of March, DAX 30’s daily chart revealed a complete expanding flat correction. The pattern was labeled A-B-C, where waves A and B were smaller (a)-(b)-(c) zigzags. The coronavirus crash was so fast and sharp that it couldn’t be counted as anything other than an impulse in wave C.

According to the theory, once a correction is over, the larger trend resumes. Since the DAX was clearly in an uptrend prior to the above-shown retracement, it made perfect sense to expect more strength after it. Being a contrarian at a time when the world seemed to be coming to an end was extremely hard. Yet, that was exactly what the analysis suggested we should do.

Investors Must Keep Their Emotions in Check

So, as COVID-19 was getting worse by the hour and the world’s economy entered a state of self-induced comma, we turned bullish on the DAX 30. The chart below shows how the situation has been developing in the two and a half months that followed.

DAX 30 surges 56% despite COVID-19 and weak economy

Once again, the market didn’t follow the news, it anticipated it. In 2009, it started rising before the Recession was over. Now, it didn’t wait for the world to deal with the COVID-19 crisis. It turned up in its darkest hour.

Will there be a second wave of the virus? If yes, how bad will it be? These are both questions we cannot answer. We don’t believe anyone in the world really can, including Dr. Fauci. The good news is that investors don’t need a PhD in epidemiology to be successful.

THIS WEEK ONLY, in addition to the seven premium instruments, all our subscribers will receive ONE Elliott Wave analysis of DAX 30 as a BONUS. Subscribe NOW and get yours on Sunday, June 14th.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Nifty 50 Index – Assessing the Fifth Wave’s Progress

In our previous article about the Indian Nifty 50 index we expressed an opinion that its uptrend cannot be trusted for much longer. Our skepticism was based on the benchmark’s weekly chart, which revealed a clear impulse pattern. A three-wave correction follows every impulse, so with the price around 13 500, we thought it was…

Read More »

S&P 500: Turning Bullish While the World Fell Apart

We find it hard to describe the past twelve months. What a year it’s been. A little over a year ago, the world was in utter panic. No-one really knew what is going on nor what was going to happen next. The prevalent emotion across the globe was fear. In the financial markets that fear…

Read More »

NZX 50 Index On the Verge of a 40% Elliott Wave Drop

NZX 50 is New Zealand’s benchmark stock market index. It was created in 2003 and includes the 50 largest companies in the country. We stumbled on it while researching one of its components – The a2 Milk Company – but that’s another story. NZX 50 climbed to almost 13 000 earlier this month, up 58%…

Read More »

Nifty 50 Index Can Severely Injure the Bulls in 2021

The U.S. S&P 500 index is up 67.6% since its March low. The Indian Nifty 50 did even better than that. The benchmark index of the second most populous country has climbed 79.4% from its 7511 bottom nine months ago. It currently trades slightly below 13 500, not far from its recent all-time high of…

Read More »

DJTA: Putting 50 Years of Data in Elliott Wave Context

Just six months ago, it felt as if the world was coming to an end. People in Europe and the USA were stockpiling necessities in preparation to isolate themselves for an unknown time period. The coronavirus panic had dragged stock market averages down 35-40% in just a month. It was the fastest plunge into a…

Read More »

Elliott Wave Setup Sends S&P 500 12% Higher

As demonstrated in our previous article about the S&P 500, the stock market started climbing while the economy looked the weakest. Then, as the markets kept rising, a new conundrum occurred. How to explain the extremely wide disconnect between the stock market and the economy? GDP forecasts for Q2 are all over the map, ranging…

Read More »

Insurance ETF Nearly Halves As COVID-19 Takes Toll

Maybe only with the exception of grocery stores, one can hardly find a stock not suffering from the COVID-19 disaster. Insurance companies were not spared either, so it is no surprise that the SPDR Insurance ETF (KIE) crashed, as well. This ETF, which ranks Progressive and Brown & Brown among its top holdings, lost 46.1%…

Read More »

More analyses