European Underperformance Continues
- Posted by JC Parets
- on March 5th, 2013
After a decade of underperformance, I guess we shouldn’t be surprised that European stocks keep struggling when compared to the United States. But I think it is worth noting that even after the monster rally in Europe during the second half of last year, the downtrend relative to the US got going again to start 2013.
With counties like Italy down over 7% year-to-date, Spain flat, Greece down, and the “quality” of Germany and France up barely 1% for the year, it’s no wonder the group is underperforming. Below is a chart of the European Top 100 Stocks vs the S&P500. The decade plus long secular downtrend in this pair seems to be continuing into the new year:
I can’t help but notice how even in the midst of all of that strength in the second half of last year, the relative strength index (RSI) never reached overbought conditions. This is more evidence that the downtrend in European stocks relative to the United States is still intact.
It looks to me like fresh lows are in store here and rallies need to be faded. The weakness in stocks is definitely coming out of Europe.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
- Are Utilities Breaking Out Relative to S&Ps?
- A Non-Random Walk Through Canadian Dollars
- Fox Business: Retail Stocks & Government Shutdowns
- United Technologies Breaks Out vs S&P500!
- Latin America Hits 9-Year Lows vs Emerging Markets
- My One-On-One Interview With CEO.CA
- What’s There Not To Like About REITs?
- ABC News: Do We Buy Gold or other Metals?
- What Are The Best Sectors In America?
- Fox Business: Metals and Treasury Bonds
Archive by Year