The SX5E is a much narrower index relative to the Stoxx 600 (check out my earlier post) but you get the same bearish conclusion. The SX5E is constrained by a major downtrend line marked by the 2007 and 2015 market tops, it is building somewhat of a expanding megaphone pattern over the last year and a massive MACD divergence from the price action. The last major...
SX5E seems to not be able to get into a reversal phase yet. If the current support does not hold, we can expect it to fall further below.
However, if the support holds firmly, then the opportunity is lost.
I will keep an eye on it as it does seem to be weak at the moment and open a position at the right time.
Expect to keep it open for at least a week.
Happy trading!
