Market review 23.02.12

The big picture for global markets

Feb 12, 2023

Hello everyone,

Just a very quick post today as personal duties call. This post is more to serve as a reminder of the big picture for global markets.

We’ll begin with the ratio of US stocks vs. the rest of the world. As shown below, the ratio broke down last year and so I continue to favor non-US stocks. This could also mean that the US Dollar Index remains in the downtrend that began last September.

Now let’s look at charts for specific global regions & countries.

Emerging Markets

VWO quarterly hit long-term support in Q4 last year (see below).
India’s NIFTY index is in a strong long-term uptrend. Relative to SPX, it is testing 13yr support. And while India has been lagging lately, the INDA ETF is sitting on its lower Bollinger Band and could be setting up for a rally (link).
ASEA (Southeast Asia) Monthly. Beautiful 5-year base pending a breakout.

Japan

EWJ hit 3-decade support last year on the quarterly chart (see below). It’s currently on 5-year support on the weekly chart (link)
DXJ (the hedged Japan ETF) has the cleanest uptrend among all global ETFs so far this decade. And is at 52-week highs (link).
Japan is the only country with a steepening yield curve, which tends to reflect a healthy economy. Because of this, Japanese banks have been ripping (link).

Europe

DAX Quarterly has reclaimed 5-year support.
GREK Monthly. 5-year base breakout.

Closing Notes

Only in recent quarters have several non-US equity indices and ETFs come out of (or retested) long-term bases ranging from 5-years to several decades. That’s a lot of stored energy. Global markets could therefore see significant upside in the coming years, especially relative to the S&P 500.

On a different topic: there’s also some interesting charts taking shape in the commodities and bond markets. I’ll save that for its own post next week. This also lets the charts to take more shape after the CPI data gets released on Tuesday.

That’s all for this week! If you found this post useful, please give it a like and share. Thanks for reading.

Twitter: @alphacharts.

Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.