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  • Bull Market Counter-Trade or Resumption of Bear Market? 0 comments
    Aug 17, 2009 10:26 PM | about stocks: FXI, EPI, EWZ, FXY
    The Shanghai Composite's breaking down through its 50-day moving average, combined with the spurt in the S&P 500 volatility index (VIX) above its 50-day moving average and a similar move in the USD index as well as 30-year treasury prices is a pretty clear indication of a directional change in investor sentiment back toward "the cup is half full or worse" on the global economic recovery. In other words, the much-anticipated reality check in stock prices is here.


     (Source: StockCharts.com)


    (Source: StockCharts.com)


    (Source: StockCharts.com)

    Whether this is just a counter-move in an emerging bull market or a resumption of a secular bear market remains to be seen. In either case, the short-term direction in economically sensitive sectors of the developed markets, the emerging markets and commodities is down, while the so-called "haven" USD, JPY and US treasuries are due for a rally.

    Disclosure: Long FXI, EPI, EEM, EWZ




    Themes: Emerging Markets Stocks: FXI, EPI, EWZ, FXY
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