From its March 16 low to its April 6 high, the S&P 500 Index surged more than 6%. That decided move higher was quite impressive, especially considering it took place in the wake of the Japan disaster, and those persistently high crude oil prices. However, over the past few trading days, we’ve seen a waning of the bullish fervor that’s driven stocks higher.

One look at the chart below of the S&P shows that we now have fallen back to the short-term, 50-day moving average (blue line). The return of the market back to its 50-day moving average could be the first sign of a wider pullback in the market. Of course, it also could be one of the many pullbacks we’ve seen that has represented an outstanding buying opportunity in domestic equities over the past eight months.

While domestic stocks have come back down to their 50-day average, that hasn’t been the case with international stocks. In fact, stocks pegged to the fast-paced emerging markets segment have enjoyed a much bigger run of late than their domestic brethren --and a much more timid pullback.

The chart below of the iShares MSCI Emerging Markets Index (EEM) shows the big move in the sector from the March low to the April high. That move was more than 12%, nearly doubling the domestic market’s move over the same period.

Similar to SPX, EEM has come off of its recent highs over the past few trading sessions. Yet unlike SPX, emerging markets aren’t close to coming back to their 50-day moving average. Here we see the relative outperformance of emerging markets when compared to homegrown stocks.

This outperformance is one reason subscribers to my Successful Investing advisory service are allocated to both domestic stocks and emerging market stocks. This diversification allows us to take advantage of both of these sectors at the same time, and if there’s any serious divergence in either of the two, this diversification protects our total portfolio.

If you have money in domestic equities, but don’t yet have an allocation to emerging markets and/or international stocks, then EEM is a good fund that merits your consideration.