Is France the Next Greece?
A look at the ETF and possible entry points.
France is a mess like the rest of Europe. More importantly, it's like Greece in that the French have "privileges" around their jobs, such as 35-hour workweeks with early retirements and massive entitlement issues.
I've often said that the Greeks modeled their government after the French, so the riots we saw in Athens are likely to be met, if not exceeded, by the French when austerity measures get announced there.
The iShares MSCI France Index (EWQ) is trading $22.50ish right now, which is no-man's-land according to the chart. So, I have two entry levels I'm watching: $23.50 on the upside and on a close below $22 on the downside. I'm setting stops at the $25 area.
Looking at the chart below, $24.50 is the better upside resistance, but I want the exposure, hence the slightly lower entry price. Plus, I'm expecting to leg into this trade, not jump in with both feet. I'm also looking out below at $22 in case the ETF moves away from me in the short term. A small move higher will get us into the short as the CAC 40 Index approaches strong resistance around 3800 (currently 3734ish) and a break above 3800+ will have us out at $25. If Europe is as bad as I think, $17.50 looks like a good downside target.
Buzz & Banter: 30 professional traders sharing trading ideas in real-time. FREE 14 day trial.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.