The Spanish Miracle!
- Posted by Greg Harmon
- on October 18th, 2012
Everybody knows that Spain does not need a bailout. I hear it from Spanish officials almost daily. And we all know that if they say it enough and we read it on the interwebs it must be true. Just look at the chart of the Spain iShares, $EWP, below. It has been rising since a ‘W’ bottom in August and is now completing another ‘W’. It has good momentum indicators as well with the Relative Strength Index (RSI) bullish and rising and the Moving Average Convergence Divergence indicator (MACD) about to cross to positive. These would support a continued move higher. It is also trading above all of its Simple Moving Averages (SMA), another positive. But if you have not bought into the
Spain iShares, $EWP
Spanish economic miracle of growth and productivity without work and enormous never ending deficit spending maybe you should wait a little bit. There are some signs of caution. First the last 3 candles, all positive long white candles, have gapped higher each day. This is often a sign of exhaustion and given the large volume Wednesday there is added concern of a blow off top. This is also happening at the 30.50-31.25 area that has been resistance in the past. nothing says it cannot move through and work higher. But if you are not long the Spanish Miracle yet, I’d wait until a hold over 31.50.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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