EWG Continues to Outperform the SPY
The iShares MSCI Germany Index (EWG) continues to act strong in an absolute sense, but also strong vis-à-vis the SPDR S&P 500 (SPY).
As we speak, the EWG is 0.02% from testing its Sept 19 high, while the SPY is 2.6% off its Sept high.
Increasingly, my relative strength work on the EWG vs. SPY argues strongly that regardless of what kind of patch-work deal our polarized-US leaders cobble together for the next few weeks, confidence in, and the efficacy of, the US Government is eroding.
Without a doubt, this could and will send investment capital towards Germany and other destinations, too.
From a near-term technical perspective, all roads point towards 28.80-29.20 next for the EWG.
Only a break of this week’s pullback low at 27.42 will compromise the timing of the climb to new highs.