Why the USA is Better than Europe in 1 Chart

I’ve been getting some emails and read a few articles recently about the strength in Europe. And sure, since the summer of 2012 (when the Eurozone was actually being called an “experiment”) European stocks have rallied very nicely. But when looking at a longer-term chart, it appears like just a counter-trend bounce.

Here is the chart of Europe compared to the United States. We’ll use the Euro Stoxx 50 Fund ETF $FEZ relative to the S&P500 ETF $SPY. All I see here are lower highs and lower lows.

2-12-14 fez vs spy weekly

Can this recent consolidation since the 2012 lows be a base where a breakout can confirm a change in that downtrend? Sure anything is possible. But for now, I’ll stick with the trend which clearly down.

I’m not one to fight a strong trend if I don’t have to. And for now, I think this chart shows very clearly how much better US Stocks are compared to European stocks.

Now remember, we are generalizing here big time. There are areas in Europe that are exploding  higher РIreland has been and continues to be my favorite place to be in that region of the world. But overall, the US is still the better place to be from a longer-term perspective.

Here is a closer look at this Europe/USA comparison over the last two years. We can see this well-defined consolidation with converging trendlines. Until this resolves itself to the upside, the benefit of the doubt still goes to the United States.

2-12-14 FEZ vs SPY daily

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Tags: $SPY $FEZ


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