Thursday, August 16, 2012

Morning Market Analysis: Long-Term Europe Edition

The weekly Spanish chart shows the market may be making a bottom.  First, notice the depth of the sell-off; prices moved from 40 to about 21 for a drop of almost 50%.  However, prices have twice attempted to sell-off to the 20/21 area.  Also note the first sell-off was done on much higher volume than the second. 

The Italian market is in a similar situation as the Spanish market, but the above chart has a less clear double bottom signal.  There is a heavier volume picture, but it's not as clear-cut as the Spanish market. 

The weekly chart of the British market shows that -- despite three quarters of contraction -- the market is actually consolidating in an ascending triangle pattern.  While the British economy is weak (they've had three quarters of contraction), it has benefited from capital inflows as a result of its haven status.

The weekly chart of the French market shows that prices have been consolidating in a sideways pattern for nearly a year.

The weekly German chart has no pattern.  However, prices are right at the 200 day EMA and are in the middle of a multi-month rally.