In the weekly chart (above) and daily chart (below) we notice the breakout to the upside of a 5-month long range (after the top in November discussed here) with high chances of touching 1250 area (Fib extensions and previous 2008 high) until end of April.
In the longer term the new weekly cycle can drive the index further up to challenge the all time highs around 1350 until August 2011.
The chart below is the relative strength of S&P500 Index (proxy for developed markets) against MSCI Emerging Markets Index. As noted in a previous post, the developed markets enjoyed an overperforming trend that seems to have just finished (see the trend break below).
The probability is now tilted to the return of the secular emerging markets overperformance.
The probability is now tilted to the return of the secular emerging markets overperformance.
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