Is it now time to short emerging markets?

May 9, 2017 12:03 PM

We have been surprised and wrong on emerging markets. We were expecting a breakdown in EM on the back of rising debt levels and a stronger U.S. dollar. Instead, EM stocks keep climbing along with other world equity markets.  But just maybe we are there, i.e. time to get short?

With French elections out of the way. Money flow is weak in U.S. equities despite new print highs. A divergence in the Industrials and Transports.  Plus, one of our favorite indicators: a 61.8% extension of the A Wave on declining momentum, showing a divergence into the price high. All in the chart below. Stay tuned. 

About the Author

Jack Crooks, President & Chief Trading Officer, Black Swan Capital, has more than 25 years of experience in the currency, equity and futures arena. He has held key positions in brokerage, investment research, money management, and trading. He is founder and president of Black Swan Capital LLC, a newsletter firm specializing in currency trading and global macro-economic analysis.