Will the S&P 500 Continue Its Relative Weakness?
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Much attention is being directed towards the S&P 500, as it nears its 2007 highs. From a performance perspective over the past 6 month, the chart below reflects the S&P 500 is very weak, from a global perspective.
In the above chart EFA has doubled SPY over the last 6 months and Germany is 3 times as strong.
I am of the belief that investors should look at and value the patterns of the leadership more than the lagging indexes.
The above 5-pack shows many of the leading global markets are at/near key resistance levels. How these relative strength global markets handle resistance should impact/ripple into the performance of the S&P 500 in the upcoming weeks and months.
Keep an eye on these relative strength winners, for a clue to how the broad markets in the U.S, will handle similar resistance lines!
Premium members have been long EFA/Short SPY for months and the market neutral trade has been working very well!