No matter where in the world you’re invested, if you’re an equity investor, odds are that last week wasn’t a particularly good one. We’ll start with the US. The graphic below is from our Trend Analyzer tool and shows the performance and trading range levels for all of the major US index ETFs. As shown in the “5-Day % Chg” column, just about every major US index saw modest declines last week. The only exceptions were small caps (IJR & IWM) and micro-caps (IWC). If you are long equities, declines are never fun, but when you consider the fact that every single one of the US index ETFs listed was overbought heading into last week, it is only natural for them to take a pause at some point to work off the overbought conditions. Even after last week’s declines, more than half of the ETFs are still overbought and every one of them with the exception of the Dow (DIA) is still well above its 50-day moving average.
While the US is at one end of the trading range spectrum, the rest of the world is at the other. The graphic below shows the current levels of major international regional ETFs around the world. Every single one of these ETFs was down last week, and only one (International Dividend Achievers – PID) was down less than 1%. While US index ETFs generally saw moderate declines last week, most regional ETFs saw sharp declines of more than 2%. As a result, all but one of the international regional ETFs listed below are oversold heading into this week.
Right now there’s quite a different picture in the US versus abroad.