US Still the Strongest of a Downtrending Global ETF Bunch

Nov 4, 2015: 12:11 PM CST

When comparing the relative strength of the US Stock Market against a basket of overseas (global) ETFs, the SPY (S&P 500) is the strongest market.

Let’s compare the SPY with 8 other global ETFs to get a quick sense of relative strength and weakness.

The chart above uses a custom TradeStation Color-Bar indicator to highlight trends and retracements.

The SPY is at the top-left of the grid which also shows the following global ETFs:

Germany (EWG), Switzerland (EWL)

Australia (EWA), Japan (EWJ), Malaysia (EWM)

China (FXI), Canada (EWC), and Mexico (EWW)

All markets saw sharp and persistent downtrendings through the middle of 2015 while the S&P 500 “held its own” with a sideways trading range at all-time highs.

Eventually the US caught up with the rest of the world, collapsing violently in August to new 2015 lows.

Most markets bottomed (reversed) either during the August collapse or during the late September retest.

Compare the trends and position of these ETFs on the retracement higher.

The S&P 500 (SPY) rallied close to the highs and has almost completely “worked off” the sell-off.

However all other markets are either near their reversal lows or – like Japan – near the midpoint of the retracement.

Here’s another perspective from FinViz Charts:

This time the SPY is at the bottom right arranged alphabetically.

FinViz also automatically generates trendlines which further helps us determine structure and trends.

If you’re swing trading or investing in global ETFs, continue studying the relative strength/weakness picture.

Even if you don’t trade these funds, it can help you get a sense of global money flow patterns and country strength/weakness.

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Corey Rosenbloom, CMT
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