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U.S. Stock Market by Martin Pring’s InterMarket Review (May 2013)

US vs The Rest of the World

It looks as though the counter-cyclical rally favoring US equities (SPY) against the rest or the world is over (EFA).That view is based on the fact that the short-term KST has now joined its long-term counterpart in the bearish camp. The key will be to see if the neckline of the indicated potential head and shoulders top is taken out with a Friday close below 2.5.

Asia Ex Japan

The Asia Ex Japan ETF is trying to push through resistance. Since the long-term KST is positive, there is a good chance that will happen. The same can be said for the relative action. Consequently, a move above the two trendlines would suggest that equity markets in this region would not only advance, but move up at a faster pace than the rest of the world.

Europe

The European IEV is also below resistance on both an absolute and relative basis. The relative line has yet to move above its 65-week EMA and is the weaker of the two. However, with both KSTs in a rising mode, upside breakouts are likely to develop, especially as they each hooked up last week.

Emerging Markets

The Emerging Market ETF, the EEM, continues to look weak on a relative basis, which means that this area should, in general, be avoided. Even the KST for absolute action in the second window appears to be struggling.

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