Emerging market sell off followed by market bottom and rebound?Emerging markets have been getting hammered since the 2008 crash. US markets and some European markets have already blasted past their previous highs as the economy has comeback. In the near term emerging markets seem to be capitulating on fear of growth and currency concerns. A closer look and one sees that the majority of this risk has already been priced in, and that the GDPs of many of these countries have increased substantially amounts since their market tops in 2007-2008. Growth concerns are almost unwarranted as all of these economies will most likely continue to outperform OECD countries in growth.
In other words, I expect waterfall type sell-off to occur were all the towels are thrown in and emerging markets become substantially cheap. Various currencies this year have been substantially devalued against the dollar, and once it all settles down, emerging markets will have outsize- long-term promise.
late feb to mid april seem like to prime candidates for when to buy emerging markets
Update: Support held for now on the channel and a double bottom might developing. I think this time the upside WILL break the upper resistance. Emerging markets are ready to play catch up. Brazil/Turkey my favorite for BIG BIG cheese. Indonesia and Vietnam looking good too, more charts to come.
