The concept of this study is to show why DAX has more chances to outperform S&P500 next year. The focus is on the relative correlation of the sharp declines on EURUSD and how those have affected the performance of DAX and S&P500 in the past 15 years.
We have singled out 6 different time periods of sharp decline on EURUSD:
January 2005 - November 2005, July 2008 - November 2008, December 2009 - June 2010, May 2011 - July 2012, May 2014 - March 2015 and May 2016 - December 2016.
Out of those 6 bearish periods for EURUSD, DAX has outperformed S&P500 5 times. The one that didn't (May 2011 - July 2012) it was during the escalation of the European sovereign debt crisis to Spain and Italy, as well as concerns over France's AAA rating.
Since the EURUSD is currently on a nearly -9% decline since February 2018 (and is projected to drop more in the next 6 months, see our relevant study here: tradingview.com/chart/EURUSD/5AeDCK4t-EURUSD-The-next-long-term-target/) and DAX is currently largely outperformed by S&P500 (-15% to -2%), statistically there are more chances for this gap to close and put DAX ahead of S&P500 in 2019.
This indicates that there is a very sound long term buy opportunity for DAX on its current levels. Modest estimates put DAX within 12,800 - 13,000 in the next 6 - 9 months.