My No. 1 Ranked International ETF is Signaling ‘Buy’ Now

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Single-digit CAPEs can be used as buy signals in global stock markets. According to research done by Mebane Faber, the average one-year gain in international markets after CAPE falls below 10 is 25.9%. Over the next three years, low-CAPE markets provide an average annual gain of 17%.

Italy is also a short-term buy. Under my 26-week rate of change (ROC) system, iShares MSCI Italy Index (ETF) (NYSEARCA:EWI) is a buy this week. This system buys when risk is low and the ETF has high relative strength (RS). The RS rank of EWI is 100, meaning that it has been among the top performers over the past six months.

EWI Chart

This system also uses a risk indicator and avoids markets when the asset class is weak. International stocks have given a buy signal this week, and EWI is currently the strongest international ETF that I follow.

After adding EWI, the 26-week ROC portfolio will hold four positions:

26-Week ROC Strategy Portfolio

This article was originally written by Michael J. Carr and posted on ProfitableTrading.

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