So What’s With This Europe Problem? – Euro STOXX 50

• Posted by Greg Harmon
• on January 27th, 2012

I hear there have been some problems going on in Greece or Portugal or Ireland or Spain or something. And I read headlines at the checkout counter about this other currency the got there, the Europe or Yugo or Euro, something like that. Not quite as interesting as Katy and Russell’s darkest marriage secrets if I have to be honest. But it did get me to look at the broad European market indexes. And in particular the Dow Jones EURO STOXX 50, $STOX5E. It is an interesting Index if you have not looked at it before. Here is a quick description from stoxx.com

The EURO STOXX Index is a broad yet liquid subset of the STOXX Europe 600 Index. With a variable number of components, the index represents large, mid and small capitalization companies of 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

A quick look at the chart below shows this index has been trending higher since about Thanksgiving. I didn’t know that Europe celebrated Thanksgiving. And it looks about to test the previous top from October at 2500. That thingy at the top, the Relative Strength Index (RSI) is

Dow Jones EURO STOXX 50, $STOX5E

also running higher and bullish. I read that that is good. The one at the bottom, the Moving Average Convergence Divergence (MACD) indicator is positive and looking to grow as well. Woop, woop! These mag articles have got to be reading this wrong. All these signs say that Europe is rockin’ it! I hear ya, I hear ya, you live right here in the U S of A, how can I rip some coin out of this? Well I saw this ETF thingy, the SPDR Euro STOXX 50 ETF, $FEZ, and ya know what? It tracks the $STOX5E pretty good. Check it out. That gold stuff is the $STOX5E. The $FEZ looks identical! Almost. A little light on the way up, a little rich on the way down. But not

SPDR Euro STOXX 50 ETF, $FEZ

so bad. Oh, and the translation is definitely a plot to confuse ya, with the 2460 level fitting only 33. Cheap! You can hop on board for 75% off! Buy a few on a move over the line and giddy up. Will be a great story to tell at the bars.

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