Chart of the Day: EWG:EWP – a European Debt Crisis Proxy?

I’m a big fan of all kinds of inter market analysis. What about this one: take the stock markets of one of the strongest European countries – Germany – and one of PIGS – Spain – and plot the quotient. Now you have a psychological barometer for the current European Sovereign debt issue (brown curve). The chart becomes even more interesting if you superimpose the Euro:

Note how the Euro turned much weaker during the last peak of the crisis in June. Even though the EWG:EWP ratio is on a similar level – indicating weakness of Spanish stocks – the Euro decline hasn’t been that dramatic so far. I don’t know if my conclusion is correct, but at this point market participants might be less concerned of the severity of the Irish situation.

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A young and savvy, yet experienced and accomplished investments mogul since ‘01; Michael has amassed a fortune as a private self investor. Recently starting his own successful blog and turning it in to a corporation — MIV Investments Inc., a company offering advice to thousands of people worldwide and attracting contracts from various reputable sources. His articles and publications have been linked to Forbes, CNN Money, Reuters, Bloomberg, and many other top worldwide mainstream media sources.