Below we provide our trading range charts for twenty key country equity indices. In each chart, the light blue shaded area represents the index's "normal trading range," which is one standard deviation above and below the 50-day moving average. The red zone represents between one and two standard deviations above the 50-day moving average, while the green zone is between one and two standard deviations below the 50-day. Moves into or above the red zone are considered overbought, while moves into or below the green zone are considered oversold.
After trading in downtrends for most of 2011, the majority of stock markets around the world are either forming or have formed new short-term uptrends. With the exception of Taiwan and China, which are currently just barely above their 50-days, every country is now either at the top of its trading range or in overbought territory. Brazil, South Africa, and all of the European indices are the most overbought.