Brown Technical Insights

Brown Technical Insights

Share this post

Brown Technical Insights
Brown Technical Insights
The Deep Dive
Copy link
Facebook
Email
Notes
More

The Deep Dive

Foreign Stocks

Scott Brown, CMT's avatar
Scott Brown, CMT
May 16, 2023
∙ Paid
1

Share this post

Brown Technical Insights
Brown Technical Insights
The Deep Dive
Copy link
Facebook
Email
Notes
More
Share

Good morning,

In yesterday’s Playbook, I shared some bullish charts on Japanese equities, and previous weeks have seen us look at Europe and China. So for today’s Deep Dive, I thought it would be prudent to put together a comprehensive overview of the international equity landscape.

Both of the Beat the Bench ETF models sport small allocations to VEU: The World ex-US ETF, so inherently the models are making a bet that international equities outperform some portion of the US equity market. And in fact, they are. VEU has outperformed the S&P 500 YTD (+8.9% vs. +7.7%) and is outperforming 8 of the 11 S&P 500 sectors.

Today’s report will review:

  • The technicals for EAFE and Emerging Markets

  • Key countries and components of those groups

  • Relative strength of key geographies

  • and more!

Let’s dive in!


EAFE

EFA: MSCI EAFE ETF

Foreign developed markets as a whole are pausing just above their February highs, in contrast to the S&P 500 which is pausing just below its February high point. Relative to the US, EAFE remains in an uptrend and just off 3-month highs.

Europe

Europe is the largest region within EAFE, representing about 50% of exposure if just looking at the mainland, and 65% of EAFE if you include the United Kingdom, which our proxy (ticker: IEV) does. IEV is above its February highs and leading vs. the S&P 500, but is arguably failing here at $52, where the breakdown in 2022 began. This bears watching, but no cause for alarm if we’re above $50.

Japan

Japan is the largest individual country within EAFE and for an apples-to-apples comparison we’re looking at EWJ: The iShares Japan ETF. EWJ just broke out of an inverse head and shoulders pattern that targets $71/share. That may be a bit lofty near-term, but after clearing the pre-Covid highs just above current levels, there is little to call resistance until $65. Relative to the S&P 500, Japan is holding above a rising 200-DMA.

In yesterday’s Playbook, we reviewed other Japan charts, which can be viewed here including:

  • Tokyo TOPIX 1000 long-term

  • Tokyo TOPIX 1000 short-term

  • DXJ: WisdomTree Hedged Japanese ETF


Emerging Markets

Keep reading with a 7-day free trial

Subscribe to Brown Technical Insights to keep reading this post and get 7 days of free access to the full post archives.

Already a paid subscriber? Sign in
© 2025 Scott Brown, CMT
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share

Copy link
Facebook
Email
Notes
More