European Appetite:
The continent is often thought of for its fine cuisine, but shareholders seem to have a strong appetite for their financial sector. The WEEKLY chart of the EUFN below gives a visual representation of this. Friday the ETF will likely extend its win streak to 9 as it is higher by 4% thus far. It is enjoying a very powerful start to 2025 up by 23% already it carries a nice dividend yield of 4.4%. Compare that with the XLF higher by 2% YTD, and pays a paltry yield of 1.4%. The ratio chart contrasting the two here shows the relationship favoring Europe began right around Thanksgiving and investor’s ongoing theme or rotation from domestic to international seems to be gaining steam. This week alone is displaying some big bifurcation as the XLF has fallen 5.4% heading into Friday and is on pace for recording an ugly bearish engulfing candle. Volume is heavy with this week already showing the third strongest WEEKLY volume since the beginning of last August with still one more session and with jobs number coming Friday morning. Notice on the WEEKLY ratio chart compared to the S&P 500 it has been helping keep the benchmark afloat. Bulls do not want to see this sector fade. The daily chart of top holding BRK/B in the XLF registered a bearish dark cloud cover candle on 3/3 and it is now quickly and Thursday with its second straight spinning op candle precisely retested the former breakout pivot of 491.77. The group can not afford a failed breakdown from the Oracle of Omaha.