FEZ European Stocks Weekly Chart Negative Divergence Sideways Channel European Stocks at 18-Month Highs

European stocks are at highs not seen since July 2011, a very important inflection point. There is only four touches of this level over the last year and one-half. Over the last four months, from price high to new price high, note the negative divergence red lines across all indicators indicating that a spank down is preferred. The thick red arrows show the prior drops in Eurozone stocks; Fall 2011 which was saved by the ECB's LTRO1 and 2 quantitative easing, the drop this past spring/summer where the low was placed in late May, and the recent pull-back in October-November, all matching the U.S. market movement.

The ECB Rate Decision and Press Conference is only a couple hours away. No change in policy is expected although Draghi may reduce the projected growth rate, if so, that would hint at a potential easing as the New Year begins and the euro would likely weaken, perhaps beginning a downward move for the Eurozone stocks.  The current print for this week is a doji candle, a spinning top, which would be agreeable to indicate a trend change. The large volume selling in early November begs to see price come down for a retest at 31-ish.

This chart is the same as Germany's chart since that is the powerhouse economic nation in Europe and the leader. Keystone posted the Germany chart the other day. Either scroll backwards thru the pages to find it or type 'EWG' into the search box above to find the Germany chart. The projection is for a down move from here and for price to return into the sideways channel thru 25.5-32.5.  This is very interesting since it means that we are watching the exact top form right now over the coming days, if, of course, the prognostication for euro and European stock downside is correct. European stocks move in the same direction as the U.S. stocks. 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.