There have been a few times this year when the world's stock markets were nearly all overbought, and a few times when they were nearly all oversold. Right now we're in one of those "oversold" periods.
Below is a look at our trading range screen for the 30 largest country ETFs. For each country, the dot represents where it's currently trading within its range, while the tail end represents where it was trading one week ago. The black vertical "N" line represents each ETF's 50-day moving average, and moves into the red or green zones are considered overbought or oversold.
After a very rough start to December, the average year-to-date change for the 30 country ETFs shown is -7.5%, so the world is now solidly in the red for the year. With a gain of 8%+, the US is an outlier to the upside.
Twenty-one of the thirty country ETFs are currently in oversold territory, with most at extreme levels (>2 standard deviations below their 50-days). Countries like Chile (ECH), India (PIN), Indonesia (IDX), Italy (EWI), Mexico (EWW), Thailand (THD) and the UK (EWU) are actually more than 3 standard deviations below their 50-days -- pretty much limit down and falling completely out of bed here. After the US broke below its 50-day today, just one ETF on the list is above its 50-day -- the Phillipines (EPHE).
Not a pretty end to the year so far. At mid-month, this has been more of a "Grinch that Stole Christmas" pullback instead of the "Santa Claus Rally" that bulls were hoping for. Let's see what the second half of the month brings, though, before we make it official.