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EFA is a diversified international ETF (see lower left box above). How these countries perform has many impacts on global growth and on the performance of the U.S. markets. Even though the S&P 500 has gained 13% since July of 2012, EFA has gained over 40% more in that time frame. Is EFA’s performance import to the Global community? It would appear so!
The above chart reflects that EFA is facing numerous resistance lines at (1) and may be forming a multi-year “Head & Shoulders” topping pattern with EFA at the apex of the right shoulder.
Should we stick our head in the sand and ignore this pattern? I don’t think investors should! Would EFA, S&P 500 and the global community benefit from an upside breakout of this pattern? YES!!!
This pattern has both bullish and bearish potential….don’t stick your head in the sand when it comes to this pattern and its impact!