Price action over the past week has seen a significant change in the medium-term outlook in both US and Emerging makets. In Europe, some indices are still lagging but I want here, to focus on EM.
The chart above shows the weekly chart of the US listed EEM ETF. After breaking from a 10 year long symmetrical triangle, price retraced all the way to the upper boundary but over the last two weeks has confirmed a break of the downtrend. This is an undeniably positive event for global markets and risk assets in general.
Adding weight to the positive picture are double bottom lows seen in both Hong Kong and Korea as shown below.
Whilst the breakdown in US and global equities looked sever in Q4 of last year, the move in Emerging Markets (including Brazil and Argentina), along with areas of the US including Semi's suggests we should begin to focus our efforts on the long side once more.