Nick Perry (Schaeffer's Investment Research) submits: The graph below shows the leading and lagging foreign market exchange traded funds over the last month:
In my previous column we saw that most groups were showing gains over the last month that trend gains strength as even the weakest funds on my list are still higher. In last week's column we also saw that iShares MSCI Japan Fund (NYSEARCA:EWJ) was the weakest performer and that continues to be the case. But I also noted that:
"the pullback from the peak that has brought the EWJ back to its 50-day moving average (black trendline). This is somewhat similar to the action in October, but the key will be if the EWJ can hold above the trendline"
Here is the updated chart:
So far the EWJ is following a similar pattern to that of October, where it bounced off its 50-day moving average. The next test for this uptrend comes as the shares approach the recent peak near 14.30.