Below we have run the 30 largest country ETFs through our trading range screen, which measures where a stock or ETF is trading within its "normal" trading range. The black vertical line represents the 50-day moving average, while the red and green areas represent overbought and oversold territory. For a more detailed description of how to read the chart, please go to the bottom of this post.

Last week at this time (the tail end for each ETF), 16 of the 30 ETFs shown were in overbought territory. As of today (the dot for each ETF), only 7 of the 30 are overbought. One of these 7 overbought countries is the US, which is now the

I arrived in Amsterdam two days ago and set sail up the Rhine last night, beginning the journey to Budapest.

(click to enlarge)

Although Amsterdam is home to only 800,000 people (16,782,300 in the entire country of the Netherlands), it is a happening city and one of my favorites. The street level commerce rivals Hong Kong, and all the locals I met had a hustle of one kind or another. This is consistent with Amsterdam's culture, as it has long been a center of commerce, and was the wealthiest city in the world in the 17th century.

In fact, all Seeking Alpha readers owe a sense of homage to Amsterdam, as it is home to the world's oldest stock exchange, the Amsterdam Beurs founded in 1602.

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Netherlands: The Macro Picture

With this rich history of commerce, it is worthwhile investigating whether the Netherlands is a place to

We occasionally write in these pages about countries that are widely assumed to have either escaped the crisis, or are held to represent bastions of fundamental economic soundness amid a sea of misery. We are doing this mainly to show that they have not and are not.

In fact, as we have pointed out with regard to various cases ranging from Canada to Denmark, there are actually almost no fundamentally sound economies in sight anywhere. The reason is in every case the same: first a policy is instituted that is characterized by the nowadays widely accepted doctrines of Anglo-Saxon central banking socialism, according to which prosperity can be achieved by artificially suppressing interest rates and/or printing money until the cows come home. Then invariably a credit-driven malinvestment bubble emerges, until in the end the whole house of cards collapses, usually the more spectacularly the later in the game it happens.

Below is an updated look at where the S&P 500 and its ten sectors currently stand within their normal trading ranges. In the table below, the red shading represents overbought territory, while the green shading represents oversold territory. The black vertical "N" line represents each sector's 50-day moving average.

As shown, the S&P 500 and six of ten sectors remain in overbought territory, with Consumer Staples the most overbought. Nine of ten sectors are above their 50-day moving averages. The Materials sector has moved solidly below its 50-day with today's declines.

Interestingly, while

© Elliott R. Morss

March 2013

Introduction

Every so often, people who buy stocks, hopefully via mutual funds and/or exchange traded funds (ETFs) should stand back from their home stock markets and look at how the rest of the world is doing. In the following, I look at what has happened to markets since U.S. banks collapsed in 2008 and the extent of the recovery since then. I conclude with thoughts on how well the underlying economies of the countries covered will do in future years.

Equities: Collapse and Recovery

1. Collapse

Table 1 goes back to the stock market peaks that occurred in either 2007 or early 2008. The "Peak/Trough Loss" is the percentage hit (peak to trough) the various markets took in the global collapse. And they are large: in an earlier piece, I concluded that globally, stock market losses were $36 trillion. Put that together with the

A year ago, at the beginning of 2012, very few investors expected that European stocks would end up performing as well as they did in the calendar year. By the time we bade farewell to 2012 and welcomed 2013, the FTSE Developed Europe Index had posted a total return of 30% for the year, compared with the S&P 500's 16% gain. And it did so in spite of the fact that the latest economic outlook for Europe's economy isn't so rosy. Here's a country-level look at some of the earnings and revenue forecast leaders and laggards for 2013 and 2014.

IMF 2013 Forecasts Lowered

True, the International Monetary Fund also warned about the weakness in Japan, which it expects will see growth contract further next year, but its comments on the "unexpectedly stubborn eurozone recession" and its decision to trim its 2013 global growth forecast to 3.5% from the 3.6%

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

The Netherlands exchange traded fund is in focus following the general election earlier this month. The center-right VVD party won a sufficient number of votes as Prime Minster Mark Rutte took office. The country is known for its strong economy, which investors hope will handle the leadership transition smoothly.

"This really shows voters were voting strategically. They realized the extremes are not the solution at the moment. The Dutch are not anti-European. They are pro-European," Famke Krumbmueller of the Eurasia political risk consultancy said in a report.

Both the left-wing Socialist Party and the right-wing Freedom party were opposed to domestic austerity. There are currently new budgetary goals set in place by the fiscal compact and the Stability Pact.

There are parallels with French President Francois Hollande and German Chancellor Angela Merkel, and prospects of an uneasy coalition, reports Anna Holligan for BBC News. Analysts agree that whatever floor

Europe is slowly moving toward closer integration. If done correctly, this should be supportive of European risky assets, but there is still considerable work to be done, particularly in bringing together Europe’s fragmented banking system. While this is still in a work in progress, we continue to focus our European exposure on Germany, the Netherlands, and Norway.

Over the past month, a lot has gone right in Europe. That said, it’s important to emphasize that Europe is not out of the woods, and the major structural reforms have yet to be implemented. In general, we see three main areas where European politicians need to deliver:

1. Tighter fiscal integration, which will ultimately involve some pooling of debt;
2. Labor market reforms – especially in southern Europe – which are necessary to make those economies more competitive; and
3. Banking reform is particularly important. Europe needs to move toward a single European

The Netherlands is generally perceived as a solid core eurozone country, almost as good as Germany itself. Attention to these two countries will come back this week as there are elections in the Netherlands on the same day that the German Constitutional Court will deliver its verdict on whether the permanent European rescue fund, the ESM is compatible with the German constitution.

At the minimum, the Dutch elections could make forming a stable government pretty difficult and there is an off-chance that one of the left-wing or right-wing fringe party will be necessary to form a government. Both the left-wing socialist party (SP) and the right-wing freedom party (the PVV of Geert Wilders) have a rather strong anti-euro stance. The PVV actually wants the Netherlands leaving the euro.

Both parties are strongly against domestic austerity for the sake of meeting abstract budgetary targets imposed by the new fiscal compact and

The ugly employment report of only 96K new jobs vs. 125K expected hit markets like a spoonful of sugar-Uncle Sugar. The numbers couldn't be worse, which is why ADP Data and Jobless Claims the previous day doesn't mean a thing. Ninety million are not in the labor force, 368K people have dropped out of the workforce, and the participation rate for men is the lowest since 1948 when most of current readers hadn't been born. Even the previous data was reduced from 163K to 141K, meaning next month's numbers should be taken with a grain of salt, and not sugar. Forget the slightly lower unemployment rate since with so many dropping off the rolls, the real rate is closer to 12% than 8.1%, and that's generous.

This puts the "bad news is good" back on the front burner and means Bernanke has no choice but to QE and inflate

Both the Fed and the European Central Bank (ECB) disappointed investors this week by not taking additional monetary action. So why did investors yawn when the Fed declined to answer investor hopes for an extension of monetary easing, but sold aggressively when the ECB failed to take action?

Part of the response can probably be blamed on Mario Draghi, the president of the ECB, who set investor expectations too high last week. After pledging to do “whatever it takes to save the Euro,” Mr. Draghi and the ECB failed to produce any immediate follow through.

But there is another reason the market took the ECB disappointment much harder than the Fed’s: the ECB can still impact the health and stability of the European economy, while there is little left for the Fed to do.

While the Fed may ultimately decide to extend the United States’ asset purchase program, it

A few weeks ago, the Wall Street Journal reported that a European court ruled that employees are not only entitled to long vacations- or at least long by American standards- but in the event they become ill while on vacation, they also get a "do-over."

In other words, employers need to guarantee five or six weeks of vacation, and if employees get ill while taking time off, they can simply retake the vacation when they're feeling better. While extending vacation time may be a good thing for an employee, it raises the costs for a company or for a government struggling to repay debt.

This relatively harmless ruling, easy to dismiss as silly, illustrates a broader European problem: Even when governments try to reform, restrictive labor laws and sympathetic courts can be an obstacle if they impede growth. Though Europe's politicians have made a reasonable, albeit slow, start to

On June 29, I published an article explaining the two key agreements reached at last week's EU Summit (the decision to renounce the European Stability Mechanism's 'preferred creditor' status on its bailout for Spanish banks, and the decision to allow rescue funds to be directly injected into struggling financial institutions) and why those agreements were so important. In that article I argued that the most important thing about the agreement was European policymakers' apparent recognition that the real problem in the EU is the toxic link between sovereigns and banks. This sentiment was echoed in a note to clients from Goldman Sachs:

"...the political commitment to break the link between sovereign and bank balance sheets has been established and to our eyes this is very important"

As important as this is, the sentiment must of course be translated to action for a commitment alone cannot extricate the eurozone

With the sovereign debt crisis centered in the developed world, the traditional notion that all developed markets are less risky for investors than all emerging markets doesn't hold up anymore. Today, while developed markets certainly top the list of the least risky countries and vice versa for emerging markets, some developed markets are now just as risky as emerging markets. At the same time, some emerging countries are now just as safe as their developed market counterparts.

It's no wonder, then, that determining how various developed and emerging markets currently stack up in terms of riskiness can be tough, especially given today's highly volatile markets. Figuring out the riskiness of a country, however, is very important for investors. In "risk-off" environments, the valuations of high risk countries tend to suffer more than the valuations of lower risk countries. Similarly, valuations of higher risk countries tend to benefit more in "risk-on"

First, as to the analysts. Basically, they should be ignored. According to Professor Philip Tetlock's new book "Expert Political Judgment", political forecasters are worse than a crude algorithm at predicting events. The more prominent the expert, the worse the predictions and there is an inverse correlation between the confidence of the individual forecaster and the accuracy of their predictions.

Problems with forecasting are not

One of the most anticipated and watched sporting events in the world, the 2012 UEFA European Football Championship kicked off late last week. Euro 2012 marks a milestone for first-time host countries Ukraine and Poland, and many are hoping that the soccer tournament brings prosperity and inspires hope in the debt-burdened continent.

There are competing theories as to whether or not major sporting events bring longer-term wealth to the region. One thing is for certain, however; the infrastructure build-out and jump in tourism plays a key role in local job creation and, more importantly, sets the stage for continued investments in the region.

To get in the spirit as the competition heats up in the first round of the tournament, we run through the 16 competitors, highlighting the ETF options available for each country.

Group A

Russia: Investors have several options when it comes to accessing Russia; the Market Vectors

Brushed off from last winter has been an ingenious German proposal to collectivize the portion of eurozone members' debt in excess of 60% of their GDP. Since the situation in the eurozone is so dire, any idea should be welcomed, especially one that has the backing of at least some of the Germans.

If not backed by the Germans (and this idea is at least backed by the German opposition, while they're trying to convince Merkel), we would likely end up in the following situation:

The idea was developed by the German Council of Economic Experts (the "wise men") and is available in pdf here. We summarize the essence:

• National (sovereign) debt up to 60% of GDP continues to be as it is, the national responsibility of individual eurozone member countries
• The debt above 60% of GDP is pooled into a 'Redemption Fund' (ERF) and Euro members have joint

The rundown from the eurozone is as follows: The bright star is German GDP (EWG) came in better than expected at .5% vs .1% expected. France (EWQ) reported a flat GDP report. Italian (EWI) GDP was -.8% and the Netherlands (EWN) -.2%. In Eastern Europe, Hungary, Czechoslovakia and Romania reported their economies in recession. Spain's bond prices continued to fall slightly and yields rose. All of this was reported as "better" news even as EWG fell sharply.

Meanwhile, back in the U.S. the CPI (if you give it any credibility) was reported as flat, Retail Sales (.1% vs .1% expected & prior .7%) was unremarkable, The Empire State Mfg Survey (17.09 vs 10 expected & 6.56 prior) beat and the Home Price Index (29 vs 26 expected & 25 prior) was positive. Retailers (XRT) will dominate the remainder of the week. Home Depot (HD) reported earnings in-line with expectations and