Recently, Spain, Italy & Germany’s markets have been diverging negatively compared to the US markets, & I think this is an early warning signal that the global stock rally may face strong headwinds soon. All 3 are below their Jan 2013 highs, yet the S&P500 is attempting to break out to multi-year highs. Europe has been on Draghi inspired OMT euphoria & its worrying for them to stall their advance now. Isn’t it also convenient for this to happen close to the March 2013 US sequester deadline?
One can follow the performances of them via EWI, EWP & EWG ETFs, which are currency neutral, tracking errors notwithstanding.
Update: here is Italy’s chart. It was rejected by its falling multi-year resistance & recently bounced off its support line from July 2012. What it goes on to do here is key, with the upcoming Italian presidential elections result the catalyst.