EEM Emerging Market's is where the 2019 rally in stocks first took hold, and it's strong price advance in the new year continues as the rally has already taken price back to the old reaction highs of 2018.
A bullish potential breakout here, would be hugely important, and would send a strong signal to the rest of the world that the economic crisis that was developing last year in these emerging markets, may now have been abated, by strong central bank manipulation worldwide.
Leadership in the emerging markets EEM is clearly seen in the almost parabolic inflow ( shown here on chart) of money back into these developed markets, lead by China as big money clearly sees the potential downside over-reaction in price in late 2018.
Does that same theory hold true now for the US, and European markets as well ?
Was the downside reaction last fall in stock prices too much, for the fundamental realities now present in 2019 ?
the fall on emerging markets might have been exagerated but the US markets are still largely overvalued, why not a fall of US markets alone to align with the now equilibrium value of EEM
tipere445
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@lapin_eliott, I agree. There is a strong divergence between these markets. I think we gonna see the US market consolidating while this gap is adjusted.