In tandem with the US stock market, global stock markets likewise scaled new heights, and MoneyShow's Tom Aspray looks overseas for new buying opportunities.

The German Dax closed up 0.86% Monday as it has made a new all-time high this week. Japan's Nikkei 225 had been closed since May 2 and gained 3.5% when it reopened on Tuesday. For the year, the Nikkei 225 is up over 36% powered by the sharply lower yen.

The outperformance of some of the overseas markets has been going on for some time, and in early November, I suggested that investors look overseas. The DAX peaked in the middle of March, and like many of the Eurozone markets, corrected more than the S&P 500 or Spyder Trust (SPY).

Many of these markets have now completed their continuation patterns as they have broken out of their trading ranges. This confirms the strong action in the US markets and these charts make a persuasive case for a further stock market gains.

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Chart Analysis: The performance chart of the Dax index shows that it was up over 35% on March 14 but just over a month later it was only up just over 24%.

  • The uptrend, line a, was broken in early April and the drop below 7500 was a negative sign.
  • When an important technical level is broken, it is important to watch the first rally.
  • In this case, the DAX was strong the first two days after the lows, and six days later, it closed back above the quarterly pivot at 7851.
  • The quarterly R1 level at 8166 was overcome this week with the R2 at 8389.
  • The first good support is at the breakout level at 8030-8075 and then at the quarterly pivot.

The S&P 500 had a little over a 4% pullback in April before accelerating to the upside.

  • The S&P 500 is currently up close to 26.5% since June 2012.
  • The quarterly R2 resistance is at $164.58.
  • There is initial support now in the $160.50 area with additional now in the $158 area.
  • Volume has declined this week but the OBV (not shown) has made new highs.

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Tickers Mentioned: Tickers: SPY, EWK, EWU, EWW