Major European Indices Near End Of Secular Bear Market

As the three above charts show, returns on the big 3 European ETFs have been essentially zero for the past 15 years.  This is typical of a secular bear market, zero return with extreme volatility throughout.  I think the picture going forward will be quite different.

Germany (EWG) is pushing up on resistance established at the 2000 peak, the breakdown period in 2007-08 which lead to the global financial crisis and the 2011 peak established prior to the European Debt Crisis.  We could see some more sideways movement before finally moving higher but I think the lows are in.

France (EWQ) is sitting on major support established in 1998-99, 2006 and more recently in 2011.  The United Kingdom (EWU) has a similar chart.  Both are sitting on key Fibonacci retracement lines.

https://en.wikipedia.org/wiki/Fibonacci_retracement

Big Pharma And Health Care Stocks Enter Year II Of Secular Bull Market

After a long, dark 10+ year secular bear market for mega cap drug companies plagued with expiring patents on blockbuster medications, a new secular bull market has now emerged.  We are currently in year II of the massive uptrend if you consider that XLV posted new multi-year highs in 2012.  JNJ is the ultimate bellwether for the health care sector and is also well on its way to higher highs.  Other mega cap drug companies (PFE, MRK and BMY) are nearing their old 2000 era highs now.  They will likely pause before smashing through these levels in the coming months (but one can never be too sure).  The biotechnology companies are leading the entire health care sector and will likely dominate the industry in the years to come.