EWP Spain Weekly Chart W Pattern Bottom Gap Channel Breakout Long and Strong

The Spain market is the mirror image of Germany. As Germany has enjoyed elevated equity markets, as traders are more comfortable playing in Europe's strongest nation, as opposed to traders leaving Spain worried about its future.  Markets now appear to be at an inflection point, however.  The DAX chart shows the daily chart wanting to see a spank down and the weekly chart agreeable as well. At the same time, Spain markets are coming off the bottom and recovering. Perhaps traders are sniffing out the coming Spain bailout that will boost Spanish markets while at the same time realizing that Germany will be stepping deeper into the stink and ooze of European debt, tainting the German play moving forward.

The EWP shows a W pattern bottom which is a very powerful indicator for any stock, ticker or index. If you reference the daily chart you will see the W forming, for the most part, under both the 50 and 200-day MA which makes it an even more powerful indication. It may be counterintuitive, especially considering that Spain's bad loans are now totaling almost 10% of the loans outstanding, but the Spain charts are very favorable to continued upside. The target for the W pattern would be 32 which is also key resistance above. If the 32 prints, the Spain bailout will already be a done deal, bouncing the index higher, with the wine flowing like water. Note the gap at 23.5-ish, that will require attention. The indicators clearly indicated the bottom with the positive divergence and continue to exhibit long and strong profiles forecasting blue skies ahead.

The 26-and-change level will be interesting since this is strong horizontal S/R. Price also now sits at the top rail of the downward-sloping channel.  Therefore, projection is for a pull back now, from 25.7-26.5 would be prudent, perhaps traveling down to fill that open gap, then resuming the upside move going forward for the weeks and months ahead, no doubt fueled by the coming stimulus, that, at the same time, may hurt Germany. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.