The EFA ETF has been a pretty good under-watched chart over the past few quarters, one that we were looking at all the way back to last summer for a major breakout. The ETF includes most large European firms, and does include non-European firms, but it consists entirely of businesses in the developed economies. The major $56 breakout is still intact. And each healthy digestion this year led us to conclude in prior posts that the market was likely not going to unravel all at once and probably would push higher yet.
Currently, though, the selling on this particular pullback has not been as orderly. On the updated weekly chart, below, note the larger size of the red weekly candles off recent highs. The breakout is still clearly safe. But the price action appears to be changing character to something less than the silky smooth trend we have seen until now. And I expect more of that in the coming weeks, meaning sloppy sideways or more down.
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