Will the S&P 500 Continue Its Relative Weakness?

February 4th, 2013

by Chris Kimble

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Much attention is being directed towards the S&P 500, as it nears its 2007 highs. From a performance perspective over the past 6 month, the chart below reflects the S&P 500 is very weak, from a global perspective.

In the above chart EFA has doubled SPY over the last 6 months and Germany is 3 times as strong.

I am of the belief that investors should look at and value the patterns of the leadership more than the lagging indexes.

The above 5-pack shows many of the leading global markets are at/near key resistance levels. How these relative strength global markets handle resistance should impact/ripple into the performance of the S&P 500 in the upcoming weeks and months.

Keep an eye on these relative strength winners, for a clue to how the broad markets in the U.S, will handle similar resistance lines!

Premium members have been long EFA/Short SPY for months and the market neutral trade has been working very well!

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