Bespoke's Country Snapshot (5/6/08)

Below we highlight our trading range charts for 21 major country indices. The red zone is between one and two standard deviations above the index's 50-day moving average (and vice versa for the green zone). When prices move in or above the red zone, the index is considered overbought.

Every county except for China, Mexico, Malaysia and Taiwan is currently in overbought territory. Even Japan, which has been in a perpetual downtrend, is overbought and now trending higher. As we highlighted last week, Brazil has been on fire, and it is currently one of the most overbought equity markets.

After bottoming in March along with US markets, indices worldwide have settled down and formed short-term uptrends.

Comments

[Lance:]

Japan in a "perpetual downtrend"? I guess perpetual would be since the end of last July, then. Prior to the end of last July, Japan spent nearly a year in an uptrend coming off the mid-year '06 worldwide equity snap-correction. Prior to that '06 correction, Japan had risen about 40 percent in the previous 12 months. So, no, hardly "perpetual" at all. While Japan has certainly lagged in some time frames (like the past 18 years as a time frame), it has not been, particularly recently, a perpetual laggard. It just seems that way to some people, especially to those who don't time the market very well.

2008 May 07 08:34 AM