[Chart Of The Week] Emerging Markets Outperformance Just Getting Started
Here is an equally-weighted chart of the stock market indexes in Brazil, Russia, India, China, South Korea and South Africa relative to the S&P500. What this is here to represent is the most important emerging markets in the world compared with U.S. Stocks. You can see the 4-year basing period:
I think if we're above that downtrend line from the late 2013 highs in this ratio, we want to approach the marketplace over-weighting Emerging Markets and thinking in a way that we want to be exposed to Natural Resources, Mining, Metals and Energy. This seems to be an overwhelming theme.
From a risk management standpoint, if Crude Oil is above 62, Canada's TSX is above 15,000 and Gold is above 1300, then this thesis probably remains correct. But to me, staying above this trendline is likely the best way to approach risk.
Premium Members access regular updates to this BRICKS vs S&P500 chart in the Intermarket Workbook.
Cheers,
JC