Are Emerging Markets Ready to Outperform?
- Posted by JC Parets
- on November 1st, 2012
Here is my recent article for MarketWatch.com:
By J.C. Parets – Nov. 1, 2012
We are going on two years of solid underperformance out of the emerging-markets space. Since October of 2010, we have seen a steady decline in emerging markets vs. the S&P 500. But we may be in the beginning stages of a shift in money flow.
But in the shorter term, we may be seeing a reversal in fortunes for the EM space. For the last six months or so, EEM has been consolidating and base-building vs. the S&P500. Bottoms are a process and not a single event. So this type of action is consistent with our reversal thesis.
While this particular pair has done nothing for six months, it has allowed for some of these declining moving averages to flatten out and begin their reversing process. In this chart, we can see the faster, shorter-term 50-day moving average try to turn up. And the longer-term 200-day moving average, which has been declining for years, has also flattened out, which is the first step to a reversal.
Momentum is also something that we value. When prices are making higher highs, you also want to see momentum making higher highs to confirm the price action. If it doesn’t, then we know something is off and we call that a bearish divergence.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
- Is Twitter Stock About to Break Out?
- Fox Business: Internet & Social Media Stocks
- About That Breakout In The New York Stock Exchange Composite
- Audio: Benzinga Morning Radio Show 2-26-15
- My Favorite Gap And Go Setup in Real Time
- Free Talk At The New York Traders Expo
- Are Social Media Stocks About To Break Out?
- BNN Appearance: Internet Stocks & Natural Gas
- Here’s Why I Like Healthcare
- Video: Chart Requests From The Community
Archive by Year