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One overseas play would be attractive if it cracks this level, analyst says after S&P's best August in decades

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Global markets to watch after the S&P's best August in decades

After the S&P 500's best August since 1986, some investors are looking overseas for opportunity.

While the U.S. market was one of last month's top performers worldwide, other global powerhouses weren't far behind. Germany's DAX, Japan's Nikkei, South Korea's Kospi and France's CAC 40 indexes all saw meaningful gains as well, with China's Shenzhen Composite and Hong Kong's Hang Seng indexes not far behind.

While it's hard to bet on the end of U.S. markets' outperformance, there could be some opportunity on the horizon in Chinese stocks, Todd Gordon, managing director at Ascent Wealth Partners, told CNBC's "Trading Nation" on Tuesday.

While China's economic data has been improving, "we're seeing chronic underperformance in Chinese equities," Gordon said, citing a chart of the iShares China Large-Cap ETF (FXI), which tracks the country's 50 largest stocks.

He pointed to the FXI's long-term consolidation pattern, noting that it has yet to break above its highs from 2008.

"Until we break above 50, we're still in a logjam," Gordon said. "So, wait for the fundamentals or valuations, as compelling as they might be, to marry up with the technicals. Use that technical breakout if you want to do so."

For now, with many other international markets still facing headwinds, "we have to continue to ride the U.S. outperformance," Gordon said.

Quint Tatro, founder and chief investment officer of Joule Financial, agreed that "if you're looking at the comparative analysis between ... the domestic markets and overseas, I would always choose the domestic markets."

"I think that just from a transparency accounting perspective, it's the biggest bang for the buck," he said in the same "Trading Nation" interview.

Buying emerging or other overseas markets expecting them to start outpacing the U.S. has typically "been a very difficult and trying bet," Tatro said.

But "if you're looking across the pond, if you will, and you're trying to figure out where the best risk-reward is, then I actually would venture into the Chinese market and I would specifically look at the FXI," Tatro said.

Not only is the ETF historically "very, very cheap" on a valuation basis, but the Nov. 3 U.S. presidential elections could also give it a boost, he said.

"Regardless of what individual takes the presidential election, I think it's in the best interests of the United States to see the improving of trade negotiations with China, and I think that bodes very well for their market," he said. "But ... there's no reason to be early there."

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