The Run in the Spanish Market is Over…Or Just Getting Started
- Posted by Greg Harmon
- on December 28th, 2012
European equity markets have been red hot with the Spanish Market ($EWP) being one of the best since mid November. But there are signs that the run higher is at the end. The light blue band has been a difficult area for it over the last 2 years. And with the Relative Strength Index (RSI) in a technically overbought condition a reversal is sought by many soon. The consolidation taking place at the top of the ‘W’ could be the start of a reversal. But there are also several signs that this could
be the start of a massive run higher. Above that blue band there is very little previous price history to slow it down. The ‘W’ and then consolidation is also a Cup and Handle and there is an Inverse Two Heads and Shoulders pattern that broke the Neckline last week. These give price objectives between 39 and 40.50. And the Measured move higher out of the bull flag takes it to 33.40. The reaction to the blue zone is the key on whether you play this long or short.
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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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