{"id":3872,"date":"2009-09-18T13:07:15","date_gmt":"2009-09-18T18:07:15","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3872"},"modified":"2009-09-18T13:07:15","modified_gmt":"2009-09-18T18:07:15","slug":"germanys-dax-free-insight-into-europes-leading-economy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/18\/germanys-dax-free-insight-into-europes-leading-economy\/","title":{"rendered":"Germany’s DAX: FREE Insight Into Europe’s Leading Economy"},"content":{"rendered":"

By Elliott Wave International<\/strong><\/p>\n

It’s one of the first rules in the book of mainstream economic wisdom: a country’s economy is the thermometer which “reads” its \t\t\t\t\t stock market’s temperature. If financial conditions are heating up, stocks rise; if they are cooling down, \t\t\t\t\t stocks fall. Were it so simple — millionaires wouldn’t make up a measly .15% of the global population.<\/p>\n

Obviously, there’s \t\t\t\t\t a major flaw with this logic; namely, it isn’t true. Time and again, stock prices smolder to near boiling \t\t\t\t\t even as economic growth chills to the bone. (The opposite also holds: Stock prices cool down even as the \t\t\t\t\t economy is on fire.)<\/p>\n

Take, for instance, Germany’s main stock index, the DAX 30. On August 13, Europe’s number one economy \t\t\t\t\t reported a .3% rise in gross domestic product (GDP) — Germany’s first quarter of growth since January 2008. \t\t\t\t\t Soon after, the DAX began to rally and finished the day at a fresh, ten-month high.<\/p>\n

In no time at all, every \t\t\t\t\t financial media outlet from Wall Street to la-la land had their story: “Germany’s DAX rose nearly 1% on the GDP data. The big picture will be one of ongoing gradual recovery through 2010.” <\/em>(LA Times)<\/p>\n

One problem: the \t\t\t\t\t DAX’s bullish flame has been burning since the index landed at a two-year low on March 9, 2009<\/span><\/strong>. \t\t\t\t\t YET — the economic data over those six months has been about as “hot” as the Arctic Circle. Here, the following news \t\t\t\t\t stories from the time say plenty:<\/p>\n