Below is a look at our trading range screen for the 30 largest country ETFs traded on US exchanges. A week ago at this time, more country stock markets were oversold than overbought, but the picture looks a lot better now. At the moment, 21 of 30 countries are in overbought territory, while the remaining 9 are in neutral territory. (A description of how to read the screen is provided below the last ETF listed.)
Nine of 30 countries are trading in extreme overbought territory. This means that they’re more than two standard deviations above their 50-day moving averages. The US (SPY) is one of the most overbought markets in the world right now, so it wouldn’t be surprising to see a short-term cool-off period here. If you’re looking for new ideas on the long side, you can use this screen to find countries that have upside momentum but aren’t yet trading at overbought levels. Some examples in the screen below include Canada (EWC), Mexico (EWW), and all of the Western Europe ETFs that have just moved out of oversold territory but have yet to re-take their 50-day moving averages (the black vertical “N” line).