Euro Stocks -- Nearing Cyclical Bear

I have long preferred to trade US stocks over Euro equities, but it is worth noting the position of
the latter now. The EU is experiencing developing economic weakness, including even Germany.
The substantial turmoil in the EU surrounding the viability of sovereign risk credits of its weaker
members could be temporarily suppressing growth, but it should be noted how close EU stocks are coming to development of a cyclical bear market which would imply that investors are looking for a more serious economic downturn. Note the chart of the Euro 350 iShares Composite: IEV

The market is approaching a deep oversold, but a sharp break below the 30 level would signify
a cyclical bear market is underway. A major test is likely for EU stocks in the weeks ahead, especially
now that Angela Merkel has again rebuffed liberalization of the ECB mandate and a move toward
the Eurobond. EU stocks rallied sharply in Oct. on the premise that the EU was set to come to grips
with its financial stresses. The discussions at G-20 in Cannes in early Nov. were ultimately viewed
as unsubstantive and investors are again losing confidence.