Comparing Greek, Spanish and Italian Stock Market Graphs since 2004

Have you checked the Greek, Spanish or Italian stock markets lately? Ok, maybe you have, but all three together? I was surprised to find out the convergence between the three graphs. Apparently the Greek stock market is the only one that has broken all support levels and is hopelessly free falling. Meanwhile, stock markets of Italy and Spain have found considerable support at 13,000 and 6,000 points respectively. Just like the downtrend of Greek stocks had met resistance at 1,500 points many months ago. Will Spanish and Italian stocks have the same fate?

Although I’m not trading any Greek stocks nowadays, there was a time when I was investing… sorry meant to say losing my money in the Greek stock market. Being a Greek it’s inevitable not to check out often enough how the Greek stock market is performing given the fact stock trading is part of my daily schedule. I may be learning how to day trade US stocks, but I always keep an eye out for promising setups in the stock graphs of the Greek market.

I thought of comparing the stock exchanges of the three struggling European countries and see if there is some kind of lining up. It turns out that the convergence is a lot stronger than I expected. The IGS (PIGS without Portugal consisting of Italy, Greece and Spain) experienced a significant uptrend in their stock markets between 2003 and 2008 that led to double-digit gains! The Italian stocks were the first to seemingly get affected by worldwide crisis, topping at 45,000 in 2007. Greece and Spain followed up with double top formations before collapsing to lower lows.

Italy’s drop eventually stopped in 2009 at the same time when Greek and Spanish stock markets’ downtrend slowed down. In the following months Greek stock exchange index plummeted below the support level at 1,500 and hasn’t stopped printing new lows. Spanish stock market in the meantime managed to keep the index above 6,000. The question now is for how long.

Will the Italian and Spanish stock markets plummet to lower lows or will the support level hold enough to prevent South European economies from plunging? Let me know of your thoughts in the comments below.