Foreign indices haven't even made new highs yet. US stocks have ran hard - and are still running. I just went long high leverage on DE30EUR/DAX. i want LITTLE to NO downside on this trade, else i am probably wrong and i will bail for minimal loss. The premise is it will follow the SPX and make new highs. I'm often wrong, but for me it's a trade worth taking. If it does end up breaking out, i would like to hold for 2 weeks or so, just before the china-us deal is signed, which could likely be dump the news event and the end of this new paradigm. The bad thing could be that DAX/SPX500 ratio does not look somewhat bullish... So SPX could easily continue to outperform(if it were to go up), but i hope that DAX is turned to live once it breaks the ATH. Also forgot to mention.... The iran situation is confluence, because the fear is priced in and the spring could be released.
Japanese market in a downtrend...check the ratio of NIKKEI to SPX. All is not well. There was massive hedging cash exposure at the 3250 level, so market is ready for more upside (downside), but the action in the NIKKEI gives me concern. The long bond has started to turn up, and is now at a level where it is ready for a selloff to happen. Treasuries need to stay quiet for this party in indexes to continue. There's a few things going on here, no clear read on it yet though.
I think the news are favorable for more upside. Fear is in the air, people calling WW3 and what not... Bull markets climb the wall of worry. But i agree that the situation is worrying. I don't think it will continue for long. It might as well top on me, but i like the setup and am taking it because the RR and odds are favorable, regardless of the outcome.
in the late stage of a bull market the emergings/foreigns may outperform the US. But right now we are still mid cycle and the US should keep outperforming, or at least on par with the overseas, but with less risk. The European markets are the most similar to the US in the maturity and the economic structure. The interest rates are into the negatives and the pension funds will be forced into stocks. definitely worth a look. Japan has a demographic problem - shrinking population. I don't see any reason it can outperform the US. Canada - a socialist dead economy that has seen the best days behind them due to the oil price crash. no reason to go there. Brazil - a wild card. feels like a coin flip. China - ASHR is dead on the chart, why go there? the PBOC just pumped RMB 800b into the banks - the growth is slowing. the currency is weakening. the export is suffering. local governments have a debt crisis far more severe than the US. Structurally the economy has much bigger problems due to the real estate bubble.. the private sector is getting choked to death. Basically right now the US is the only game in town. Stick with the winners! The cheaper countries are cheap for a reason.
I'm bailing out of this idea. NOT long anymore. Might even short it instead if proper opportunity arises.