Thursday, February 21, 2013

He’s staking his future on a hell of a past and Sunday’s elections are coming on fast.  Europe aint complaining about what it’s got, seen better times but who has not.  We’re reminded of the Bob Dylan and Robert Hunter collaboration as former Italian Prime Minister Silvio Berlusconi makes another bid to lead Italy through its current fiscal difficulties.  He’s an old boll weevil looking for a home and if Italians don’t like him they’ll leave him alone.  Whatever happens in Italy’s elections, Quant looks ready to get back on the Europe train that performed so well last fall.  The SPDR DJ EURO STOXX 50 Fund (FEZ) is back in the top 10 at 7th place.

Correcting about 6% since the beginning of the month, the fund’s technical scores have declined to a 59.7 average but that has boosted its Fundamental Score up to a decent 77.8.  Quant may see something only dead men know as the market is bearish exemplified by a very high 91.5 sentiment score.  Readers will remember how well this fund performed when it reached the upper ranks last fall when sentiment was also bearish.  Quant stepped aside as FEZ got as low as 97th place in December but the fund has worked its way back up the rankings since then.  Italian companies comprise only 8% of its 50 constituents with another two thirds evenly split between France and Germany.  Those latter two countries see their dedicated ETFs, EWQ and EWG, making the top 50 but Italy’s EWI is mired at 469th place in today’s rankings.

Everyone knows Berlusconi can charm the whistle off an evening train but the jury’s out on whether he can ease the Italians’ pain.  Market wisdom says the best time to buy equities is in the midst of a recession and Europe is clearly there now.  So as the investing world shorts the continent, Quant is going to the valley and signing its song, the echo will decide if it was right or wrong.  We appreciate you listening to the ETFGsm song, we’ve teased you about an announcement and it won’t be long, maybe tomorrow.

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