Switzerland facing multi-year resistance
The Switzerland ETF (EWL) presents us with an unusual picture: it is the only security I have noticed that has a beautiful trend line running from the 2000 market top, to the 2007 top, and now in play for a possible 2014 top. Here is decade-plus chart of EWL.
It is worth noting that EWL has not broken down, nor shown any particular weakness at present. However, it has formed a textbook rising wedge over the last couple of years as it now hits the decade-plus trend line of major tops.
It adds up to an interesting situation that bears close watching, imho.
As an interesting aside, have you noticed the action in SPY? Despite all the grief about crushed small caps and technology darlings, SPY is actually working on a fourth straight up-week! It is coasting squarely in the middle of its ever narrowing (rising wedge) range. Interesting.
Conversely, small caps are testing the support at what may be the neckline of a Head and Shoulders pattern.
It’s been another interesting week. It feels like this major cross-roads has been happening in slow motion for months now. Only time will tell if this is the formation of a major top, or the base before one final push higher. In my view, either way, the end of this bubble is in sight. Only time will tell what shape it takes.