close icon

Eurozone blue chips may be at risk

The market remains in a downtrend, wreaking havoc on banks in Austria, Bulgaria and Portugal. Meanwhile, the euro reversed to the downside against the US dollar and is expected to continue lower over the course of 2014. The Euro Stoxx 50 is an index designed to provide a blue-chip representation of Supersector leaders in the Eurozone, but the crash of March 2000 and June 2007 made it extremely difficult for the blue chips to advance. The common understanding is that blue-chip stocks advance even in bear market conditions, but here the case is different.
The market appears to fail every time in making a new high. The March 2000 and June 2007 tops are connected with a trend line, showing the existence of a 14-year bear market in the Eurozone. All upward movements are nothing more than bear market corrective rallies.
EUROZONE EURO STOXX 50 weekly
The recovery from the 2009 bottom is a counter-trend movement. The waves’ character resembles corrective advance. The price movement is contained in a trend channel and fails to reach the trend line connecting the tops of 2000 and 2007. This failure sets the mood for a possible acceleration of the downtrend soon.
EUROZONE EURO STOXX 50 daily
The stage is set for a near-term decline, having all the symptoms of a downtrend acceleration. The Elliott Wave labeling completes the situation at least for a short-term decline.
EUROZONE EURO STOXX  50 daily 2
The Eurozone is softly said to be in a recession. The chart of the blue-chip stock index says all there is to be said. The long-term bear market shows no signs of slowing down in the near future. A serious depression may overtake the European Union soon.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

DAX 30 Surged 50%+ in Three Months. Here is Why

THIS WEEK ONLY, in addition to the seven premium instruments, all our subscribers will receive ONE Elliott Wave analysis of DAX 30 as a BONUS. Subscribe NOW and get yours on Sunday, June 14th. The last time we wrote about the German DAX 30, the index was in a free fall. It was March 2nd…

Read More »

Elliott Wave Setup Sends S&P 500 12% Higher

As demonstrated in our previous article about the S&P 500, the stock market started climbing while the economy looked the weakest. Then, as the markets kept rising, a new conundrum occurred. How to explain the extremely wide disconnect between the stock market and the economy? GDP forecasts for Q2 are all over the map, ranging…

Read More »

Insurance ETF Nearly Halves As COVID-19 Takes Toll

Maybe only with the exception of grocery stores, one can hardly find a stock not suffering from the COVID-19 disaster. Insurance companies were not spared either, so it is no surprise that the SPDR Insurance ETF (KIE) crashed, as well. This ETF, which ranks Progressive and Brown & Brown among its top holdings, lost 46.1%…

Read More »

Another Nightmarish Week, Another Illogical S&P Surge

As COVID-19 spreads across the U.S., the economy is teetering on the verge of collapse. Initial jobless claims came in at 6.6 million yesterday, bringing the three-week tally to nearly 17 million. The unemployment rate is estimated to have already surpassed its 2008-2009 recession level. Economists at Goldman Sachs, Morgan Stanley and the IMF predict…

Read More »

S&P 500 Elliott Wave Analysis Giveaway

The S&P 500 crashed by as much as 35% in just one month. And while the coronavirus outbreak was totally unpredictable, the crash it caused made perfect sense. Elliott Wave is our favorite method of analysis, but as the market kept rising we decided to back it up with fundamental data. The result was a…

Read More »

S&P 500, Against All Logic, Re-Enters Bull Market

The coronavirus pandemic forced the global economy to grind to a halt. Major U.S. stock market indices made their fastest plunge into bear market in history. In less than two months, DJIA and the S&P 500 lost 38.4% and 35.4%, respectively. “The virus is just starting to spread in the United States, the market is…

Read More »

Dow Jones Transports Ready for a Rebound?

The coronavirus pandemic is wreaking havoc on the global economy. Governments are closing malls, restaurants and literally all kinds of social gathering places, and even putting entire cities on lockdown. In the meantime, stock market indices are in free fall. The S&P 500 is down 28.7% YTD and the Dow Jones Industrials lost 35.2% since…

Read More »

More analyses