Germany has been a leader of the global rally in risk assets off the December 2011 lows. Sustained weakness in the Germany ETF (EWG) and the German DAX Index may foreshadow a correction in the S&P 500. Therefore, it is prudent to monitor German stocks over the next week or so.

The charts below are intraday (as of 11 a.m. ET). The comments below only remain significant if the signals remain at today's close. Similar setups showing slowing momentum did carry into today's close for the German DAX Index.

The chart below shows the Germany ETF (EWG) with the Relative Strength Index (RSI) and MACD. A break of an RSI trendline can foreshadow further weakness. When the RSI trend was broken from the September 2011 bottoming process (far left orange arrow top), weakness in price followed. RSI is trying to break the current trend from the December 2011 low in a similar manner.

In the chart above, MACD is shown at the bottom. The last two bearish crosses (black below red) were followed by weakness in price (see orange arrows at bottom of chart above). The purple arrow above shows what appears to be a formation of another bearish MACD cross. This cross is only valid if it carries into today's close.

The chart below shows Germany (EWG) with Full Stochastic (top) and Williams %R (bottom). The two recent breaks below 80 on the Full Stochastic indicator were followed by weakness in price (see red arrows top-left). A similar bearish break is attempting to form currently (top-right).

Williams %R is shown at the bottom of the chart above. Weakness often follows a break below -20 after a sustained stay above -20 (see pink arrow). If Williams %R fails to recapture -20 on an advance, it is a sign of slowing momentum (see orange arrow bottom-middle). The last push higher in EWG failed to see Williams %R recapture -20 (orange arrow bottom left).