Overtime

Foreign equities review

Good morning,

In yesterday’s Monday Morning Playbook, we looked at foreign equities breaking out vs. the S&P 500.

In addition, our ETF portfolios initiated positions in two foreign stock ETFs, the first time we’ve had international exposure since November.

So today, we’re taking foreign stocks into Overtime and reviewing:

• Absolute and relative technicals for EAFE and EM

• EAFE vs. EM

• 3 ETFs I like tactically

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EAFE

Structural breakout intact

Above are the weekly candles for the iShares MSCI EAFE Index Fund. So far, this looks like a textbook retest of the breakout point and EFA is long and strong if above $75/share.

Short-term trend change vs. the S&P 500

3 days ago, the slope of the 3-month moving average turned upward for the first time since December. It didn’t last long then, but a sustained short-term trend change is necessary if we want to consider putting EAFE in portfolios.

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EM

Powerful breakout on the weekly chart for emerging markets