The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. The opinions expressed are those of the author and do not represent the views of TheStreet or its management.

NEW YORK ( ETF Expert ) -- Did you think it was over? Did you believe that the bailouts of Greece and Ireland had effectively put an end to the PIIGS challenge?

On a monthly momentum basis, Europe had been on a roll. And many market strategists had suggested that a fundamental shift from the macroeconomic eurozone picture to the microeconomic attractiveness of European corporations would keep European ETFs on a hot streak.

Well ... not so fast. We may have seen Greece and Ireland tap the bailout funds. However, Portugal, Italy and Spain are still having a tough time finding buyers for their government-issued bonds.

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Specifically, the European Central Bank had to engage in a bit of "quantitative easing," after watching Portugal's 10-year yield catapult to a euro-era high of 7.63%. Analysts believe that any yield of more than 7% is unsustainable for Portugal. (Note: The ECB buying did move Portugal's 10-year back down to 7.29%.)

Nevertheless, the ongoing uncertainty over the size and scope of the eurozone's current bailout backing, not to mention Portugal's current unwillingness to admit to needing any help, has caused investors to back away from European ETFs.

Here's the tale of the tape (as of Feb. 10):

Portugal Debt Fears Smack European ETFs

  • Market Vectors Poland (PLND) is down about 2.3% over five days and up 3.8% over the past month.
  • iShares MSCI Spain (EWP) is down about 2.1% over five days and up 19.5% over the past month.
  • iShares MSCI Belgium (EWK) is down about 2.0% over five days and up 6.9% over the past month.
  • iShares MSCI Italy (EWI) is down about 0.4% over five days and up 15.0% over the past month.
  • iShares MSCI France (EWQ) is down about 0.6% over five days and up 10.6% over the past month.

  • By comparison, the S&P 500 Trust (SPY) is up about 1.1% over five days and up 3.7% over the past month.

The question investors have to address is whether the shares of European corporations represented in many country ETFs and regional ETFs can withstand the heat. Granted, many of the companies had been beaten down in 2010. Yet collectively, the forward P/E projections may be too rosy when one takes into account the deceleration of emerging-market growth.

Personally, I still like iShares Germany ( EWG) and iShares Sweden ( EWD). Both have been able to avoid getting burned in the euro-kitchen.

With that said, I do utilize the Vanguard Europe Fund ( VGK) as a proxy for the region. A 10% pullback to $47.0 should trigger a stop-limit sell order for active managers of risk. A more troublesome signal for Europe would occur if VGK fell below its 200-day moving average, currently at $45.35.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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