Dividend Growth Investing, Retirement Income, Stock Market Investing, Stock Market Timing

Is a Bear Stalking Us?

This was just brought to my attention, and deserves some consideration. It’s always best when all the world’s major markets are in synch, and rising together. There is, after all, a world economy, and we are not an island unto ourselves. One continent’s economy has an effect and an influence upon another.

Without going into numbers, the economy of the EU is among the largest in the world, and they buy and sell to all the rest of the world… so, how is the EU doing? We should take a look.

Someone brought the ETF symbol IEV to my attention, and it really caused me to sit up and take notice… because if IEV is a true proxy of the health of the European exchanges and economy, they’re in trouble!

There are 6 specific things we look for. 1.) Price falls thru its 50 day mov avg., 2.) price falls thru its 200 day move avg., 3.) 50 day mov avg turns downward, 4.) 50 day mov avg falls thru the 200 day mov avg, called “The Death Cross,” 5.) the 200 day mov avg turns downward, and, finally, the price is not able to rise and exceed its down-trending moving averages, as they have become price resistance.

So, what do we see? I have 13 ETFs to represent all of Europe, from each individual nation to a cross-section of all of them. What are they saying right now? In alphabetical order by symbol: EWD, Sweden, bear market; EWG, Germany, bear market; EWI, Italy, bear market; EWK, Belgium, bear market; EWL, Switzerland, bear market; EWN, Netherlands, bear market; EWO, Austria, bear market; EWP, Spain, bear market; EWQ, France, bear market; EWU, United Kingdom, bear market; FEZ, the Eurostoxx largest 50, bear market; IEV, the S&P Europe 350, bear market; and finally, VGK, the Vanguard Europe Vipers, bear market.

My friends, every measure of Europe’s stock markets, which are also assessments of Europe’s economy, are in bear markets, meeting all 6 of the above criteria. So, what’s my point, and what am I concerned about… Europe is sneezing, will we catch a cold? There may be a bear stalking the U.S. markets, and we likely need to be more aware than usual.

Here’s to your successful investing!
Harold F Crowell

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