Those Fibonacci retracement levels on the charts of the major Europe iShares that I highlighted a few days ago continue to provide resistance, which could be an issue for European stocks and ultimately our market going forward.
The trajectory of these funds began to flatten in June and a month later they broke trend line support and their 50 day moving averages, and began a sharp decline into August. The S&P 500 index lagged by a month but followed a similar path flattening out in July and at the end of the month breaking trend line support and its 50 day average. The bounce off the August lows was well coordinated, but while the S&P index has made new highs, the Europe funds have only retraced half or less of their former highs.
It is hard to imagine that our market can continue on its current track, without a technical recovery in European stocks.