This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Asia-Pacific ETFs Become Relative Strength Standouts

Stocks in this article: EWT EPP ENZL EWA EWY

NEW YORK ( ETF Expert) -- Three months ago, Europe's never-ending drama and China's economic slowdown were collectively crushing Asia-Pacific exporters.

Single-country exchange-traded funds representing places like Australia, South Korea and Taiwan had relative strength factors less than 50, meaning that half or more of the entire ETF universe were beating them.

Then came the bailout dialogues.

In late July, the president of the European Central Bank, Mario Draghi, exclaimed that they would do "whatever it takes" to protect the euro. Similarly, the chairman of the U.S. Federal Reserve, Ben Bernanke, strongly hinted that a third round of quantitative easing would be unleashed to bolster U.S. economic prospects. And by September, both central banks made good on their promises to purchase toxic debts to alleviate global financial concerns.

Granted, the promise of worldwide QE3 activity has been propping up stock and commodity prices. Yet that alone does not explain why Asia-Pacific ETFs have catapulted into the 70th and 90th percentile of relative strength factor scores. In truth, the probability of China participating in the "stimulus games" is driving Asia-Pacific ETFs higher. (See the table below.)

For instance, China reduced bank reserve ratios as well as approved infrastructure projects over the summertime. Also, the People's Bank of China added a record $46 billion U.S. (290 billion yuan) to its financial system last week. And while China's most recent manufacturing index showed signs of economic contraction, the PMI measure improved from 49.2 in August to 49.8 in September. (Note: 50 is the mark for expansion.)

Even with domestic data in Taiwan showing contraction, and even with South Korean trade to the European Union on the decline, corresponding ETFs have rocketed ahead. In my estimation, that can only be a function of optimism that China's economy is finally firming.

In the case of iShares MSCI Taiwan (EWT), the current price is above both its 50-day and its 200-day moving averages. Moreover, the 50-day recently crossed above and over the 200-day -- a bullish sign for stock ETF enthusiasts.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

Gary Gordon reads:

Real Clear Markets
Jeff Miller
Charles Kirk
On Twitter, Gary Gordon follows:

Jonathan Hoenig
Doug Kass
Hard Assets Investor

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs