A quick thought on the DAX. Notice that all movement in 2009 looks like a .B wave, it is an a-b-c in which the c and a legs are about vector equal. So if it looks like a duck , quacks like one etc maybe it is. We will keep an eye on this canary bird as it is a very good precursor of what awaits the market overall. Look also at EWN, the Dutch EFT back at the $10 level. For the moment all this means little as the wave can still develop further but lets not lose sight of it.

Note wave 1 could be one spot higher up.  Waves 1 and 4 would both be about 5 months.

The Dax is down 160 points as I write this, that is about 4%. Remember that one should, barring other information, always look for  a 50-62% “correction” after a full up cycle. We double topped at about 8000, a dead give away that trouble was just over the horizon. Then we dropped pretty rapidly to 4000 or the 50% level. For the past 4 months or so we have been flirting with this level ( actually under one count pretty well the exact same time we spent in wave 2! ). All this is not to say that we have to do 62% (about 3000), but the possibility is very realistic and getting more so.

 

Update.    The Dax  is usually pretty clear. It rose to 8000 in 2000, dropped to a little over 2000 in 2003 and then climbed back up to 8000, double topping there and now we are in the second (or C) down-leg. As C waves are always made up of 5 individual waves, 3 down and 2 up, this is what we would expect to see. Also the C waves are, more often than not, larger than the A waves to which they are related. So far none of this has happened! Ergo either we missed something, or we are not done yet ( perhaps not by a long shot). Waves 1,2 and 3 are relatively clear, then 4 gets messy. It is not unequivocally clear where 3 ends and 4 begins, nor is it clear what form 4 is  taking. But it is clear that there is no 5th wave and we are also not even near a logical target at 4258 right now.