Since Spike Trade does not trade country or commodity ETFs, I thought I would post a couple of charts on Europe for those interested. EPV is Ultra Short Europe and EUO is Ultra Short the EURO.

The rally in Europe looks like it’s stalling out. EPV is testing long-term support around 20, and if it holds, looks good for a bounce to the declining 20 EMA, or possibly the 200 SMA. The EUO also looks like the EURO rally is over. Despite some bullish bank tests and some debt reduction in some EU countries, the Eurozone has some significant fundamental issues to overcome. Regardless, nimble traders can take advantage of the bounces and declines. For long Europe trades, I use FEZ, and for long EURO trades I use FXE or ULE.

The odd thing is that UUP, the long dollar ETF, looks like it wants to bounce, as does GLD, the gold ETF. So we have the dollar perking up, the EURO running on empty, gold looking frisky, and the Yen hitting resistance. Just to confuse the issue, TLT, the bond ETF looks like it wants to extend its rally. Is this is why we love the markets? Also for those interested, ECH or Chile is on a tear and in pullback position. Malaysia or EWM is also rallying, breaking through a rare Quad Top resistance pattern. Interested traders should proceed with caution in these foreign and emerging markets–nasty things can happen over night that can wreck the best of trades.

That said, I find trading country ETFs easier than trading the US indexes. Most of the time, they respond systemically to reversion to the mean trading, moving back and forth to their value/moving averages. I look to catch them at ST/OS or ST/OB and bet that they return to their moving averages. While the movements aren’t extraordinary, the percentages of winning trades is high, so you make small incremental profits.