Last Wednesday we noted to subscribers that the action off of the June low at 18.50 in the iShares MSCI Germany Index (EWG) was part of a recovery rally period that would resolve in a downside reversal and resumption of the dominant downtrend off of the March highs (23.87).
Since then, the EWG followed the bearish price path and has plunged to revisit its June low, just ahead of the EU Summit at the end of this week.
Is there a message in the weak action of the EWG right here? Let's put it this way: The weakness in the German country fund ETF is NOT a confidence-builder heading into the Summit.
Inability of the EWG to hold 18.50 points the price structure towards 18.00-17.80 next. Only a climb and close above 19.25 will begin to argue that a meaningful near term low is in place.