The Netherlands Leading The European Bull Charge


In case you missed it, we posted a piece yesterday on the STOXX Europe 600 in which we reiterated our month-long bullish stance on European equities. Again, our premise went something like this (for more color on our view take a look at yesterday’s post):

  1. European equity averages broke out to new highs in January
  2. The averages have pulled back from April to July
  3. The momentum & significance of the breakouts suggest the upside efforts are not finished
  4. The averages held key support levels that we had identified

Like many other markets across the continent, the Netherlands AEX stock index (AEX) has followed closely to the above script. And following developments of the past few days, the AEX is now among the markets leading the way for this European rally. We mentioned in yesterday’s post that the major obstacle in the way of the STOXX 600 and other averages was the down trendline from the market peak in April. The AEX has now broken that trendline and now has its April highs squarely in its sights.


Odds are the AEX consolidates, at least briefly, at those April highs before resuming a new leg upward. Of note,  those April highs also represent the precise 61.8% Fibonacci Retracement of the decline from the AEX’s all-time high in 2000 to its low in 2009. That is further reason to expect a pause at that level. It also add to the significance of a break out above that level, if and when it should occur.

We are not going to belabor the European bull case anymore in this post. We have covered it pretty extensively over the past month in posts on both continent-wide indexes and individual country indexes. The point is that the bull scenario continues to unfold according to the case we laid out. Most of the averages are already some 10% above their lows of the past few weeks. So they are halfway to a bull market and the rally has hardly even gotten started. The Netherlands is one more example of the bullish scenario unfolding in Europe. Now that it has broken its down trendline, it has a chance to lead the way in Europe to an even more substantial rally to new highs.


More from Dana Lyons, JLFMI and My401kPro.

The commentary included in this blog is provided for informational purposes only. It does not constitute a recommendation to invest in any specific investment product or service. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.