Leading Indicator - ADLN Line

This is very interesting.

Top chart is for DAX Index
Bottom is for DAX Cumulative ADLN Index

ADLN is Advance Decline Index.

I have spoken about it before.

This is a REAL leading indicator.

Look at 2000 - DAX peaked parabolically

Look at ADLN line - it peaked in 1998 and was weakening since then.

The divergence in DAX and ADLN was striking and this was telling us that the rally is losing steam and the market is about to collapse.

This did happen in 2000 and ADLN gave a timely warning sign.

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Look at DAX in 2007-08
It peaked in 07 and again went on to peak in early 2008

Look at ADLN
It peaked in early 07 and was weakening since then

We saw this clear divergence between DAX and ADLN in 07 and 08

This was a great signal to get out of the DAX

ADLN was telling us that the market is going to collapse.
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Look at DAX in 2011 - now

It made some kind of double top.
ADLN is weak and flattish since 2010
It is telling us rally is losing steam
This is NOT a  BULL market rally
This is a VERY BEARISH sign on DAX

DAX has risen since 2010 - ADLN has been flat - more or less

PLS KEEP AN EYE ON THIS

If DAX makes a new high or a triple top - and ADLN does not follow - WE HAVE A RED FLAG on the coming crash in DAX

This is simple yet elegant and works perfectly well.

Let us explore this in the coming months.

If I am right - this will be one more successful market call.