This is the Dax, that is Frankfurt, Germany index.  It is a total return index and consequently is not directly comparable to others that do not include the dividend. These two are the big picture. Below is the small picture;

This is time consuming stuff and I do not have the right charting equipment, but nevertheless this may add some confidence that we are, or were, at a top of sorts. Furthermore,  I am not at all confident that there actually was a triangle so using the channel I start it in 2009 rather than 2012. By the way , this index from the 2000 peak to the recent peak is up roughly 77% by my calculation. Take away a 2% dividend over 18 years would leave a capital appreciation of just 41% or a little more than 2% per annum. A lot less than the Dow etc.

It now looks like we completed an initial first wave down – either a wave 1 or A – followed by an irregular a-b-c correction back up. It should be complete soon. Then wave 3 or c should start. At this time I would very much favour a wave 3, etc,etc. Ultimately there would be little to stop this before the entire uptrend from 2009 is reversed. Time will tell.

The usual then, March 4 , 2015, and now and now charts;

The Dax is, ofcourse, a total return index so contrary to, for instance the Dow, the value of the Dax should increase by the dividends and the price appreciation of the stocks. It should therefore record relatively higher values than most other indexes.

Recently I was reading somebody else’s take on the Dax. The argument was that we are in a contracting diagonal triangle, shown in red in the semi-log chart on the right. This may well be correct but it differs from what I thought was going on some two years ago, which is a triangle with a thrust to slightly under 12000. Initially that worked out quite well as the Dax did turn at about that time and dropped some 5000 points or >40%. But then the Dax turned around again and recouped all the losses and then some. One explanation could be that the “thrust” having started with a 1-2, 1-2, only completed a wave 3 and needed a 4 and 5 before completing.

In any event looking at it today, I still prefer the triangle interpretation but that has become somewhat irrelevant as regardless of whether or not the diagonal or the triangle are operative, the Dax is very close to peaking. The triangles mouth measurement, applied from the low point of the e-wave (about 8000 points) suggests a peak at around 13000 to 13250. Under both scenarios, as always, the ultimate target is the level of the 4th wave of previous degree or roughly 2000. When is always a little more difficult but this index should turn soon as in days or weeks but not months.

By the way, had you bought right at the top of the tech bubble in 2000, your total return to date is still less than 4% per annum. That includes the dividends of about 2%!