Sweden Improving But Still Has Work To Do

JC Parets
November 14, 2019

From the desk of Tom Bruni @BruniCharting

Tuesday's Mystery Chart had a lot of people talking and guessing (incorrectly, as usual), so thank you all for your feedback and participation.

Overall the feedback was that the chart was a "no-touch" until a breakout.

With that as our backdrop, let's get into it.

The chart in question is the OMX Stockholm 30 /S&P 500 (OMX/SPX) failing to break higher of a long-term base, but the actual chart is inverted. Instead of a failed breakout, it's a failed breakdown with prices quickly reclaiming support after making new 21-year lows.

This looks like action we've seen in other European countries relative to the S&P 500 and suggests we cannot be short as long as prices are above their former lows. That doesn't automatically make it a long, neutral works too.

Click on chart to enlarge view.

Overall this is just an interesting chart that we're keeping on our radar. From a structural perspective Sweden ETF (EWD) has done nothing for 20 years, but until we break above resistance at 37.25 it's going to be hard for long-term outperformance versus a trending US stock market to occur.

What do you all think? Is this the relative bottom in Swedish stocks?

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Thanks for reading and please let us know if you have any questions!

Allstarcharts Team

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