Global Equity Snapshot: U.S., Europe, Japan Currently Oversold; No Indexes Overbought

Below we have updated our historical trading range and P/E charts of ten major global equity markets. The dark blue line represents the index's price, while the green line represents the index's trailing 12-month P/E ratio. The shaded green area represents two standard deviations above and below the index's 50-day moving average. When the price moves above or below this area, the index is considered overbought or oversold.

Based on current prices, the US, UK, France, Germany, Japan and Italy are oversold, while no indices are overbought. The P/E ratios for European indices have declined with prices and look attractive. The S&P 500's P/E ratio has remained flat even though the index has declined in price. Notice how low the P/E ratio of the S&P got during the August correction and compare it to current levels. (Those Financials are ruining the earnings party for everyone.)