For example, here is a chart of the last few day’s action on the DOW and iShares Europe-Pacific ETF:
http://tinyurl.com/2dr59h
Sure looks like they move in tandem to me. Is this because the EAFE Index stocks are large multinationals who happen to be based overseas, so they are not all that different than large multinationals based in the US? If this is correct then one would need to purchase shares of much smaller companies overseas whos markets are local, not international. That takes a lot of homework.
Base on a 5 days chart, it might look like it move in tandem but if you look at a 5 years chart, there’s a huge difference. I think his logic is that although the price change of the stock market might be the same/similar, if you add in the devaluation of the dollar, that will be the difference. Since the dollar doesn’t move that quickly, 5 days chart won’t show it.