The STOXX Europe 600 is trending below declining and bearishly positioned 26 and 40-week moving averages, and as BofAML's Stephen Suttmeier warns, ECB quantitative easing has not reversed this bearish trend.
The 2016 set-up is similar to early 2001 and early 2008 with important resistance at 350 and important support at 300. Both 2001 and 2008 saw rebounds into bearishly positioned and falling 26/40-week MAs that formed important lower tops in May.
This pattern could repeat or at least rhyme moving into May 2016, and the bearish wedge is a warning that Europe could follow this pattern.
The breaks below 300 in September 2011 and June 2008 led to much deeper weakness and a similar break in 2016 could see the SXXP trend down toward 200.