On December 20th, we noted that "the world is overbought" by posting our trading range screen for 30 country ETFs. At that time, while the rest of the world's markets were surging, the US market was struggling due to the Fiscal Cliff issue. Now that the US has moved into overbought territory, where does the rest of the world stand? Still overbought.
As shown below, 25 out of the 30 country ETFs in our trading range screen remain overbought, while none are oversold. Just one -- Indonesia (NYSEARCA:IDX) -- is below its 50-day moving average.
After surging in December and early January, stocks have pulled back a bit over the last couple of days. We expect sideways trading action at the least to continue in the near term until extreme overbought levels are worked off. As long as long-term uptrends remain in place, however, the pullback should offer up some pretty good buying opportunities.