North American markets may not be the best bet going forward

Here’s a question worth pondering:

What if the great runaway NA bull market that has lasted over a decade is slowing down?

I’m not asking if the US and Canadian markets are entering into a bear market. What I am asking is this – Are NA markets about to slowdown in growth and stock market returns from the trajectory that they’ve been on since 2009? This is a question – not a statement. Please feel free to offer your thoughts on the comment sections below.

Below are charts of the SPX and the TSX. Notice how both indices have made three failed attempts at breaking through their old highs since the end of 2017. This is a change of pace for the previously unstoppable momentum. No new highs…which are necessary to identify a bull trend. Hmmmm….

TSX stuck below 16,500-ish
SPX Stuck below a 2900-ish

Now I have another question:

Let’s assume that NA markets are stuck in the current trading range for a while. Let’s assume that even if they break out (which they eventually will) – the upside momentum will no longer be at the same pace as we have seen over the past decade. My question therefore is  – which markets are just now entering into their bull phases if NA markets are indeed slowing down?

There are some markets that show typical bottom/base/breakout patterns. These markets show much better patterns than the top-failing patterns on the SPX and TSX. Perhaps they are the candidates for new momentum.

What potential is there for these markets to “replace” the growth of NA markets?

Money always needs a home. Sure, investors will hold cash for periods of time to avoid risk. But eventually, they need to make more than 1% on their money. Alternatives to the stock market, such as bonds (domestic and International), commodities and international stock exchanges will receive investment capital upon a rotation out of NA stocks.

Today, I would like to examine a few of the international indices that may be worthy of consideration for an investor’s portfolio. I spent a fair amount of time filtering through 25 world market indices, via their respective ETF’s. What a nice guy I am – I’ve done all the work for you here. Buy me something nice for my birthday.

Out of these 25 international ETF’s, I narrowed it down to 3 ETF’s that I would trade for mid-termed period (months), and one that I would trade for a quick rebound. Each has its own risk – so do your diligence before you consider buying any of these. They are turnaround potentials attempting to rebound from depressed conditions – so there is risk. But, if you answered the above questions positively (i.e., you feel NA markets are slowing and that money may rotate into new areas), these are the kinds of patterns you may want to start looking for in stocks, sectors and countries. Here goes:

Singapore (EWS)

A nice little H&S bottom pattern followed by a lovely break of the neckline at $24 confirmed the Singapore’s validity. The current test of the neckline may be presenting an ideal entry point. First target is the old double-top high of $27

Austria (EWO)

Home of one of my personal hero’s, Arnold Schwarzenegger, Austria’s stock market broke its downtrend and is putting in a series of higher highs and lows on the daily chart. Not as neat and tidy as the Singapore chart –but still, not a bad looking turnaround so far.

Belgium (EWK)

Belgium is an iconic land to cyclists like me. Home of the greatest and toughest spring classic road races and fall season Cyclo-cross racing – this is a country of hardy folk. They also like their beer in Belgium – it’s the home of Anheuser Busch , which makes up for 25% of the index. This index has endured its harsh Belgium weather and seems to be staging a turnaround. It may be failing the angled neckline breakout – but give it a week or two before you buy to confirm it turns around.

South Korea (EWY)

22% of this index is in Samsung. This chart clearly shows us that there is a place to buy, and a place to sell. Buy near $56, sell near $64. Stop loss below $56 for a breakdown that lasts more than a few days.

So there you have it. You can thank me by forwarding this blog to friends and family who might enjoy following it. Remember, you can get notifications of new blogs by following us on Twitter (@ValueTrend)

Happy trading!

7 Comments

  • well you asked! I miss, not so much with today’s charts, but I miss the ability to open larger versions of your charts. I also don’t mind the odd political comment. Lol

    Reply
    • Carey
      They changed the program that I use for the blog–I will see if I can figure out how to make the charts expandable.
      And thanks for the other comment–sometimes I know I must alienate myself a little when I rant on the current government–but there is only so much one can tolerate before speaking out!

      Reply
  • Right click on the chart select view image and you can zoom in/out.

    Reply
  • On my Mac I just spread my 2 fingers and it expands

    Reply
  • I absolutely loved your political rant (fable) and I don’t understand why more people on Bay St. like CEO’s don’t have the guts to take a stand. The economics and ethics of this govt. are brutal. Excellent blog as always, food for thought!

    Reply
    • Thanks Don
      Its funny because I am aware that when I rant, it polorizes me a bit. I try to tell people that in 30 years in this business-I have tried to be balanced on the subject of politics-only in the past 3 years (aka new Fed. gov’t) have I ever spoken out against a government. Honestly–I didn’t have any major negatives towards other Liberal governments–always had respect even if I didn’t agree with everything they did– for example Bob Rae is and was when in power a very smart man, despite his differing politics–I admire the Green party for their principles if not their grasp on the economy….in other words, no real axe to grind–until the current PM got in. I simply had to say something-he is not qualified, very self serving, proving to be corrupt (even the liberal faithful cant deny what we all heard on the SNC taped conversations…let alone the current Norman case), very immature, and lacking any form of economic smarts-and BTW–Kevin O’Leary has been vocal about it too.

      Reply

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