Watch Germany for Technical Signals

By | April 21, 2015

Monday’s market action was impressive and may very well be the first leg of another assault on the upper border of the S&P 500 index trading channel. But the widely speculated proximate cause of the downdraft in stocks on Friday, namely the weakness in Germany, has not gone away. The Germany iShares (EWG) fund was up a solid 0.87% yesterday, but closed in lower candle range and just managed to recapture the 50 day moving average after a small rally in the last hour of trading. It failed to close the Friday gap and retake the intermediate term uptrend line.
The fund should open higher this morning based on pre-market trading, but watch to see if it fades after Europe closes today like it did yesterday. The ability to maintain momentum into the close is a requirement for returning to its previous trend.


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