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Are Emerging Markets Looking At A Trend Change?

Published 09/26/2018, 04:09 PM
Updated 07/09/2023, 06:31 AM

While most global stocks topped at the beginning of 2018, some markets recovered – and some didn't. For instance, the major U.S. stock market indexes have fought back to make new highs, while emerging and developed markets outside the U.S. continued to struggle.

Strength in the U.S. Dollar combined with a strong bias toward U.S. stocks has the rest of the world feeling left out.

In today’s 2-pack of charts, we look at the iShares MSCI Emerging Markets ETF (NYSE:EEM) and iShares MSCI EAFE ETF (NYSE:EFA) to get a glimpse at what’s happening outside the U.S. And perhaps at what’s to come.

Both ETFs have been much weaker than the SPY. For that to change, these ETFs need to break out of the current downtrend. EEM and EFA are testing important falling resistance at point (1).

Stay tuned to this pattern – it should tell investors if/when there is a trend change.

MSCI Emerging Markets (left), MSCI EAFE

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