Trouble in Europe – Fugetaboutit!

• Posted by Greg Harmon
• on October 27th, 2011

Oh, I have read about the concern that the Euro is going to collapse and the citizens of Greece and Portugal will become slave labor for Germany and France. But frankly when I look at the charts for the French and German Stock there does not seem to be any major concern.

French CAC 40 Index

The chart for the French CAC 40 Index above shows an Inverse Head and Shoulders pattern formed. With confirmation today with a move through the neckline it has a target of 3770. Right back where it was. And even if it does not reach the target, there have been a series of higher lows over the last month leading to a quadruple top. Additionally the relative Strength Index (RSI) has been trending higher. Not great strength but not future demise either and an uptrend. in fact the Chart below for the German DAX Composite is a bit more bullish. It also has been making higher

German DAX Composite

lows since bottoming last month and is now testing resistance at 6100 for the third time. After showing some Topping tails in the bull flag it pushed through today and is heading higher. The move over 6100 triggers a target from the bull flag at 6700. And the RSI for the DAX is trending higher even more strongly. This is not weakness and a strong downtrend that might be expected if the world (or at least the part you live in) was going to collapse. Why even the Euro is not reacting

Currency Shares Euro Trust, $FXE

horribly having risen 5% off of its low. From the Currency Shares Euro Trust, $FXE it has broken though resistance at 139.20 in the pre-market and it sees resistance next at 140.65 and then back in the previous channel with a top at 144.70. Again it may not get all the way there but the trend is higher. So where are the future problems in Europe? It seems that may be the markets had over reacted to the initial news and are now correcting. Or Europe realizes what happens when you print money. Well at least that is what they are telling me now.

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