Why the air is getting thin for the DAX now!

Last Updated: 6. März 2024By

For some investors, charts are just colorful images. But as a chart technician, I can derive quite accurate forecasts from these charts. With the DAX, we are now seeing an extremely important development.

By the way, the DAX has been moving in an upward wedge formation since 2003 (that’s over 20 years!). Whenever the index has touched the upper edge of this wedge formation, the next major crash was not far away. Just like now.

The air is getting thin for the DAX! Currently, the DAX is approaching this upper edge again. At around 18,300 points, „game over“ could be reached. The DAX is currently close to this level (around 17,600 points, despite an expected recession this year). I expect a deep crash of several thousand points in the next 12 months.

Trend reversal looming: Is the rally for the DAX coming to an end? Source: aktienscreener.com

DAX: Is the next -25% crash coming soon? This crash does not have to happen immediately. It could also lead to a (possibly years-long) sideways movement beforehand. But the fact is: the further upside potential is likely to be very limited.

The risks are higher than the chances. It is no longer worth investing in the DAX. At least, if the index behaves like it has in the last 20 years.

All crashes in the last 20 years started from the upper edge of the wedge: 2008, 2015, 2018, and 2020. None were less than -25%. Some even went much lower.

There can be many triggers for such a market crash. I sincerely hope that the trigger will not be an escalation of the war in Ukraine. I am not explicitly predicting such a development because I still believe in human rationality.

But I am prepared for a DAX crash in any case. And I will even try to profit from this event (and of course, also my readers of the stock market service „Voigts Global Profits“).