Australia: Back in one of our November Sector Spotlights, we took a look at the bullish chart of the Dow Jones Australian Stock Index (Dow Jones is the creator of the index). At that point, the index was at 265, and rising. Today it's at 282.8, which represents a 6.7 percent gain since the last time we looked at it. For the sake of comparison, the S&P 500 gained only 1.0 percent during the same period. And on our chart of both indexes below, it's clear that the Australian market has managed to sustain its momentum much better than the S&P 500 over the last year. Over the last twelve months, the Australian market gained 28.5 percent, and still looks like it could keep going higher.

Australian Index and S&P 500 - Weekly (with 200 day moving averages)

Europe: Would you believe the overall European market is up by 5.7 percent over the last three months? That tops the S&P 500's performance, but what's stunning is that the Euro-union was supposed to be facing some tough times. A closer look reveals otherwise. While the media painted less-than-pretty picture for this region, the economic indicators have been steadily improving. This is especially true in Germany, but is true to some extent for all these nations. And like Australia's chart, the S&P Europe 350 (SPUY) chart shows that these stocks were making new highs in January, while U.S. stocks were retreating. Over the last twelve months, this index is up by 8.5 percent.

S&P Europe 350 - Weekly (with 200 day moving average)

Asia: Remember how Asia - and China specifically - was going to roar once the global economy got back on its feet? Somebody forgot to tell Asia that. Mostly, the Pacific rim's stocks have been a big disappointment, failing to deliver on what Wall Street had promised. As our proxy for the Asian market, we're using the CBOE Asia 25 ADR Index (EYR), as it is the broadest representation of the entire region that we could actually make a long-term chart of. Over the last three months, this index (and therefore then underlying Asian stocks) is up 7.3 percent. That's not bad, but for the last twelve months, this index is up by only 4.0 percent. The reason we bring this one up is not so much to point out strength, but to illustrate the fact that nothing is infallible. If a trade or position is obvious, it's probably too late. That said, these stocks are hinting at a breakout, so don't count them out yet.

CBOE Asia 25 ADR Index - Weekly (with 200 day moving average)

The reasons for these variances are numerous. The weak U.S. dollar and low interest rates have a lot to do with it, but that doesn't change the fact that these other countries are generating enough profit to entice folks to buy stocks. We're also contending with exchnage rates which can affect the degree of import and export demands. Plus, there are dozens of unknown or intangible factors. But the charts still look the same regardless of the underlying reasons, and that's what we're mainly interested in - the charts.

And the point? There are two. First, we just wanted to highlight the fact that the better opportunities out there may not be domestic ones. Europe and Australia have a lot to offer, and even the Pacific rim stocks are looking juicy to aggressive speculators. And while trading in these stocks or ADRs may be thin, you may find that the lack of interest and volatility in them makes trading them slightly easier. Our other point is more philosophical.....while the idea of foreign holdings may seem risky on the surface, the opposite may be true. Holding U.S. stocks ended up being the riskier proposition in 2004, as they underperformed. Will the same be true in 2005, or will the S&P 500 claim the top spot? Keep an eye on these charts for your answer, but be prepared to act on these charts when you finally do get your answer.

Price Headley is the founder and chief analyst of BigTrends.com, which provides daily stock and options recommendations and education.