Did you realize that so far this year, France’s CAC 40 stock index has taken back nearly 2 years’ worth of gains in a mere 7 months? Same is true for the pan-European Eurostoxx 50 index.
And, as markets dropped in September, less than 10% of futures traders said they were bullish on the DAX, FTSE, CAC 40 and Eurostoxx 50 in August and September.
Last but not least, the decline off the May highs has a distinct 5-wave Elliott wave structure.
This and other evidence you find in the October 2011 European Financial Forecast makes one thing clear: Soon, you can expect European stocks to move in the direction that will surprise a lot of people.
What do Greece, Portugal, Italy, France, Spain and EuroStoxx 50 have in common? The 6 charts you see side-by-side in the new issue point out one fact: These markets are within spitting distance of their 2009 lows. In fact, Greek and Portuguese stocks have already broken below. Our analysis explains why these are not trivial developments.
The 2007 Flashback, Part Deux? Markets never do the exact same thing twice, but they come close. The FTSE formed a double top in 2007 -- and wouldn't you know it, a nearly identical structure is in progress now. There are more noteworthy developments, and the editor Brian Whitmer spells it all out.
DAX & Market Psychology: In September, Germany's VDAX, the implied volatility "fear" index, spiked to its highest levels since the 2008-09 crash -- i.e., the markets’ latest swoon terrified option traders. How should you interpret this signal? "Market Psychology" section explains.
"Diversify” is the conventional analysts' go-to advice for beating a bear market. October European Financial Forecast shows you a comparative chart of ten FTSE 350 sectors which tells you, at a glance, whether or not diversification is a good idea in today's Europe.
Market Spotlight -- The Euro: The 8% drop in September decisively answered the question posed in last month’s European Financial Forecast; there is little doubt about the euro's larger trend now. What's more, the new issue shows you a chart of three big peaks in EUR/USD since its all-time high in 2008. Find out what this and other evidence means for the euro.
Another Spotlight -- Russia: After losing 80% by early 2009, Russia’s RTS index retraced more than 80% of its 2008-09 decline. The April 2011 European Financial Forecast called for Russian shares to “soon fall back into a crushing decline..." The decline we've seen this year sports a five-wave Elliott wave structure -- a telling sign of what's ahead for the RTS.
Tap into these insights right now via a RISK-FREE, instant-access subscription to The European Financial Forecast Service. (You also get instant access to the still-valuable September 2011 European Financial Forecast.)