Kumowizard
Short

SP500/EUSTX50 - Better Relative "value" in European equities

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We can not just bet which way a certain equity index will move, but we can also bet on their relative performance regardless the general direction.

The chart represents the relative performance of SP500             Indx             over the Eurostoxx50 composite. The candles are set to Heiken Ashi to filter noise a bit.
For now we see the following signs:
- the ratio reached previous high (means SP500             outperformed) but Heiken Ashi candles signal that this performance may switch back in favour of Europe.
- The "Price" is still above the Kumo and Kijun Sen, but the lower horizontal line has become very important given that Kijun Sen and Senkou B stay together at same level
- Slow Stoch is on sell
- MACD gives a sell signal, negative divergence persist since last top -> this may also indicate we had a double top in

Basically with increased possibility for a full QE from ECB and hawkish-like stance from FED the policy divergence itself also indicates that European equities can start performing better in the future.
Again, this doesn't mean being general bullish or bearish on equities. The spread (ratio) compression can happen both on a general bull or on a general bear market.

This one worked in a nice and quick way. Getting close to target! Watch for Heiken Ashi exhaustion signals.
Or... who knows what the ECB brings on Thursday... maybe start taking profit.
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