There have been a series of daily-scale compressions across European equity indices that are now breaking upward:
This comes on Thanksgiving day when US exchanges are mostly closed - although US electronic Equity index futures are open and also trading higher. These European compression breaks are clear 'buy' signals and we will follow but it is worth a word of caution. As others have pointed out, the background situation in the US is that of an imminent end to the era of ultra-easy money and a gradual return to higher interest rates. The situation in Europe is utterly different, where heavy central bank stimulus is expected to continue for some long time to come.
Markets have been balanced evenly between bulls and bears for months - as evidenced by compressions that have formed at various time frames in equity indices and bonds. These compressions break and markets trend a bit, then more compressions occur and so on. The forces at play on the bear side in the US include the prospect of slightly tighter money conditions soon while the opposite is true in Europe - the prospect of even more ECB activism is a comfort to Eurobulls. These are not just theoretical considerations as this translates into a little extra selling in the US and a little extra buying in Europe, day by day.
This is revealed in several ways but particularly when the US (or Europe) is closed when the other is open, like today. The absence of the little extra selling from US bears has contributed to today's upward move and it is entirely possible that it will reverse tomorrow when the US re-opens.
Nonetheless, we follow the signals so advise buying the European equity markets today. These signals are so widespread that it probably doesn't matter much which markets to buy - even Italy has broken upward. We consistently advise buying Germany when there is any reason to buy anything in Europe (for reasons often given) so we will stick with that view here but the UK also has a clean signal (and is doing better than the others economically) and Holland also looks good, as does Sweden. Buy.