As you may have heard, international markets have been leading the global performance landscape in 2025. Of the 45 global ETFs we track closely, 22 are up at least 10% year-to-date, and seven have already gained more than 20%. Those are impressive numbers for an entire year—let alone just a few weeks. The key question now is: Are these moves sustainable? And for investors, is it still a good time to buy? While many ETFs have shown remarkable strength, today we’re focusing on the iShares MSCI Germany ETF (EWG) for two key reasons. First, it’s among the top performers, already up over 20% this year. Second, Germany plays a critical role in Europe’s economy, financial system, and geopolitical landscape, making it a market worth watching. Before diving in, it’s important to note that EWG differs from the local German DAX index because it’s priced in U.S. dollars. This means EWG benefits when the dollar weakens — and with the dollar declining for most of 2025, EWG has surged. Looking at EWG’s long-term chart, the ETF has blasted through multi-decade resistance and is making new all-time highs in March’s early trading sessions. This could mark a major breakout with years of upside potential. In other words, from a big-picture perspective, this setup looks undeniably bullish. It has taken quite a big move in a short amount of time for that breakout to take place. After flirting with its 200-day moving average since reclaiming it in late 2023, EWG finally used it as a launching pad this past December. That rally has continued uninterrupted through early March. In fact, EWG is now 20% above its 200-day moving average — the widest spread since early February 2023. While the ETF is much higher now than it was two years ago, history suggests that such an extreme move can lead to a period of digestion. Back in early 2023, a similar surge eventually lost momentum, with EWG stalling near new highs for months before rolling over in July. It didn’t decisively reclaim those February 2023 highs until a full year later, in February 2024. Every situation is different, of course, but the odds of EWG maintaining this pace without some sort of cooling-off period are low. If nothing else, patience is recommended over chasing at these levels. Given all of this, it’s no surprise that the EWG vs. S & P 500 ratio has spiked. In fact, its 14-week RSI is now at 80, one of the highest readings in EWG’s history. This is an important chart because, more often than not, an overbought RSI in the EWG/SPX ratio has marked a key top. That was the case from late 2007 through early 2023—the very period discussed earlier. The same pattern also played out from 2000 through 2002. The common denominator in both of those periods? The EWG/SPX relative line was in a long-term downtrend. In other words, while EWG occasionally outperformed, those rallies were just mean-reverting moves within a broader decline. However, from 2003 through most of 2007, EWG was in a long uptrend versus the S & P 500. During that stretch, the four overbought RSI readings were actually bullish signals. While short-term pullbacks followed, they produced higher lows, and EWG’s relative strength persisted. Bringing it back to today — we expect EWG’s pace to slow down, and when it does, its overbought condition relative to the S & P 500 should ease. The key question then becomes: Will buyers step in on the dip, as they did from 2003-2007? If they do, it would be a strong sign that this latest breakout could have years of upside ahead. — Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
