Non-U.S. Stocks Facing An Important Resistance Test

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September 27, 2018 5:56am NYSE:EFA

From Chris Kimble: While most global stocks topped at the beginning of 2018, some markets recovered… and some did not. For instance, the major U.S. stock market indexes have fought back to make new highs, while Emerging Markets and Developed markets outside the U.S. continued to struggle.


Strength in the U.S. Dollar combined with a strong bias toward U.S. stocks has the rest of the world feeling left out.

In today’s 2-pack of charts, we look at the iShares MSCI Emerging Markets ETF(NYSEARCA: EEM) and iShares MSCI EAFE ETF(NYSEARCA: EFA) to get a glimpse at what’s happening outside the U.S.  And perhaps what’s to come.

Both ETFs have been much weaker than the S&P 500 (NYSEARCA: SPY). For that to change, these ETFs need to break out of the current downtrend.  EEM and EFA are testing important falling resistance at point (1).

Stay tuned to this pattern – it should tell investors if/when there is a trend change.

Emerging Markets ETF (EEM) and EAFE ETF (EFA) Charts

The iShares MSCI EAFE Index Fund ETF (EFA) was unchanged in premarket trading Thursday. Year-to-date, EFA has declined -2.30%, versus a 9.06% rise in the benchmark S&P 500 index during the same period.

EFA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 61 ETFs in the Foreign Large Cap Blend ETFs category.


This article is brought to you courtesy of Kimble Charting Solutions.


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