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Forget America — global stocks are about to stage a massive rebound: Technical analyst

Forget U.S. stocks—go global!: Technical analyst

After seven years of the S&P 500 crushing non-U.S. stocks, international equities are about to stage a big comeback. At least, that's what technical analyst Jonathan Krinsky predicts.

The MSCI All-World Ex-U.S. index has lagged the in each year since 2010, for the longest streak of underperformance since the former index was created in 1988. Even more dramatically, the S&P has nearly doubled the rest of the world's performance since 2010.

At this point, "we think it's time to look for a reversion to the mean in favor of global equities," Krinsky, chief market technician at MKM Partners, wrote in a recent research note.

Examining the charts, he observes that the global index "is approaching a key breakout out of an 18-month base"; if it manages to close above a level slightly higher than current prices, that would be "very bullish for global equities."

While acknowledging that "bears will argue this poor action is indicative that the U.S. markets have gone too far," Krinsky said Wednesday on CNBC's "Trading Nation" that "we remain constructive on U.S. equities, but we think there's some catch-up to be done by the rest of the world."

There would be a few ways to play this thesis. One could buy the stocks of Japan or Germany, two countries with a heavy weighting in the index of which Krinsky is especially bullish. Or one could simply add exposure to the whole group by buying Vanguard's FTSE All-World ex-U.S. ETF (VEU).

To be sure, not everyone is on board with the trade.

"The U.S. has been driving growth globally, and will continue to do so," Dennis Davitt, portfolio manager at Harvest Volatility Management, predicted on "Trading Nation."

"I think you're going to continue to see that spread stay where it is, and it may even increase."