Dec
9

Global Overview

Fitch cut its ratings on Greece  and S&P cuts its outlook on Spain. I decided to go through all of the country specific  ETFs to get a broad view of the world economy.

All of the European indexes are trading below their 50-day SMA. In the case of Spain, Austria and Italy, the indexes are trading below their 89-day SMA too.

The Americas other than Canada are trading above their 50-day SMAs.

It is clear that European stocks are weaker than other stocks. I am particularly interested in watching weak countries such as Spain, Austria and Italy. I think the 89-day will judge whether we’re seeing a pullback and excuse to sell off or whether this decline has more teeth. If those indexes don’t hold the 89-day, we’ll likely see more substantial declines down to the 200-day.

EUROPE

ewg_001

Germany (EWG) trading below 50 DMA and hanging onto 89 DMA.

ewp

Spain (EWP) trading below 50 DMA and breaking through 89 DMA.

 

ewu

England (EWU) trading below 50 DMA and just above 89 DMA.

 

ewl

Switzerland (EWL) trading below 50 DMA and approaching 89 DMA.

ewo

Austria (EWO) trading below 50 DMA and 89 DMA.  One of the weakest countries along with Spain.

ewd

Sweden (EWD) trading below 50 DMA and testing 89 DMA.

ewq

France (EWQ) trading below 50 DMA and approaching 89 DMA.

ewi

Italy (EWI) trading below 50 DMA and 89 DMA.

ewn

Netherlands (EWN) trading below 50 DMA and testing 89 DMA.

ewk

Belgium (EWK) trading below 50 DMA and 89 DMA.

ASIA

 

ewj_004

Japan (EWJ) recovered from a recent spike on the Yen and trades above all long term MAs.

inp

India (INP) is trading above all long term MAs.

ewt

Taiwan (EWT) remains in a solid uptrend.

ewh

Hong Kong (EWH) remains in a solid uptrend.

fxi_001

China (FXI) is trading at the 50 DMA.

AMERICAS

spy_004

SPY remains above its 50 DMA.

ewz

Brazil (EWZ) remains in a solid uptrend.

eww

Mexico (EWW) remains in a solid uptrend.

ewc

Canada (EWC) trading below its 50 DMA and hanging above the 89 DMA.

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  • Erik
    Just a reflektion; When charting country etf:s in USD there is a potential currency effect. I`m from Sweden and therefore I know that the Swedich stock market is trading above the 50 SMA in local currency. I would guess that some of the eurozone members are also trading above the 50 SMA in Euro.

    I think you could make the case that the Swedish market is very small and therefore should be viewed from the perspective of a foreign investor, that is in USD (or perhaps EUR). Although there is a complicating fact, that the Swedish stock market is dominated by many big exporters that benfit from a weaker currency..

    For the EUR countries I´m not sure it´s correct to view the local markets in USD, even if the "global" investor is presumably USD based. This is because I´m guessing that many large institutions are hedging their currency exposure..

    Whats your take on this? Is it really correct to us TA when including a potential currency effect?

    (Thanks for a really great blog btw, really liked your thoughts on a possible traderanding market)
  • Erik - I always enjoy comments from a non-USA perspective. I think you raise a good point.

    The technicals work from a US perspective because you want all factors included in your trade including currency risk. But you're right. I think if you wanted to say that a market was strong or weak on an absolute basis it would be better to use the native index denominated in the native currency.
  • Great work, thanks for the review. I like EWA & EWZ. We've rode the rally on EWZ. EWJ hasn't taken too hard a hit from the revised downwards GDP, so far. EWT reported best export data in more than a year. JP Morgan is bullish on Europe: http://ftalphaville.ft.com/blog/2009/12/07/8735... There's some projections for interest rates & GDP also.
  • I like EWJ technically. The GDP miss makes me hesitant. You could argue that Euro strength has been hurting Europe. Stronger US and weaker Europe is more reason to think stronger USD/weaker EUR. Could help EUR outperform.
  • Hi CC, Can you post some of your trades at my site--You always seem to have the trend right, ( AAPL) which will really help me in momentum trades--
  • Zee,

    I'll definitely swing by more often than I have lately.
  • AAPL, really a good looking short at 196, but the signal I have, has bit me before by 3%--so APPL either down Thursday or up 2 to 3% on Thursday--
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