Compare Breadth: Europe, Japan, USA, China And India

EUROPE, JAPAN and USA:

Back in December, many institutions recommended over-weighting Europe, and some preferred Japan. They may still feel so, but at this time the internals for the key European and Japanese stock indexes are just a lousy as for the S&P 500.

Europe’s STOXX 600  has the highest portion of stocks within 2% of their trailing 1-year high at 4.03%, but that is not good.Japan’s NIKKEI 225 is near zero at 0.45%. The S&P 500 is between Europe and Japan at 2.01%

The percentage of constituents of the STOXX in a 10% Correction or worse is 78.49%; Japan 91.96% and the USA 80.48%. Those are very bad numbers

The percentage of constituents of the STOXX in a 20% Bear or worse is 57.31%; Japan 62.95%; and the USA 58.15%. Those are very, very bad numbers.

You can see from the table image that the depth of the problem is not evident in the price performance of the indexes themselves, which are market-cap weighted and dominated by a small number of mega-cap members.

The median STOXX member is 23.46% off its high, while the index is only off 17.83%. Both are bad numbers, but the median stock is about 6% farther from its high than the index is from its high.

Japan and the US show even greater divergences. While all three indexes have similar median stock positions relative to their trailing highs, Japan’s median stock is about 10% off its high more than the NIKKEI; and the S&P 500 median stock is about 11.5% farther off than the index.

Only about 20% to 25% of the constituents of those three indexes have 200-day indexes with the tip pointing up (75% to 80% have tips pointing down). The direction of the tip of the trend line is an important thing, as it takes a lot of force to make it change direction from positive to negative, or from negative to positive.

The percentage of members of those indexes that have prices above their 200-day averages is similar to the percentages with trend line tips pointing up.