The MSN Finance Chart of the Small Cap Pure Value, the Russell 2000 Value, the S&P, Europe, Emerging Markets, S&P Developed Property Excluding The US, Emerging Market Small Cap Dividends, Frontier Markets, and Food ... RZV, IWN, SPY, FEZ, EEM, WPS, DGS, FRN, and FUD from May 10, 2010 to September 10, 2010, shows that since the EU Finance and State Leaders convened the Eurozone May 2010 Summit and announced European Economic Governance, seigniorage aid for Greece, and called for a Monetary Union with seigniorage authority to issue eurobonds, many investors have found safe-haven in the agriculture sector, with ETFs, such as food, FUD, and the frontier markets, FRN, while US Small cap value shares, IWN, being exposed to the financial sector, have suffered great loss.
Small Cap Pure Value, RZV, being exposed to deteriorating financials and banks, has experienced great debt deflation, losing 17%.
On the other hand, a flight to safety from the European Sovereign Debt crisis, has propelled Food, FUD, 20%, and Frontier Markets, FRN, 17%. The agriculture commodities, in particular food, FUD, have been propelled by bidding for Potash, POT, and by rising Corn, CORN, Grains, GRU, Coffee, JO, and Sugar, SGG, prices ... FUD, CORN, GRU, JO, SGG.
It’s reasonable to believe that when debt deflation starts to rage again that the Frontier Markets, FRN, will maintain their value better than Europe, FEZ, and the Russell 2000 Value, IWN, as the emerging market currencies, CEW, are likely to retain their value better than the major currencies, DBV, as seen in the chart of DBV relative to CEW.
The chart of the emerging market currencies, CEW, shows that it is trading strongly up to resistance 22.28.
The chart of the developed currencies, DBV, shows that it is trading weakly up to resistance at 22.70.
The emerging market currencies are trading more strongly than the developed currencies because they are not as encumbered with sovereign debt and the associated banking issues.
America with its small cap companies, highly dependent upon bank financing, and exposed to a flattening 30-10 yield curve, $TYX:$TNX, together with Europe, being exposed to European Sovereign Debt, are likely to be ground zeros for economic austerity, hardship and suffering.
It’s likely that those living in Peru, EPU, will experience a kinder, gentler way of life than those in the developed markets. The lollipop hanging man candlestick in the daily chart of Peru suggests that a market top has been made in stocks.The monthly chart of Peru, EPU, as of September 10, 2010, shows three white soldiers, a reversal pattern.
Disclosure: I am invested in gold bullion