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Michael Gayed: Energy Stocks May Signal Go Time for Emerging Markets
From the Buzz & Banter: It's time to watch for a change in leadership.
Michael A. Gayed    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

I continue to think that the energy sector is due for a period of leadership after more than three long years of relative underperformance.

Energy's behavior tends to be closely linked to that of materials, which relative to the S&P 500 (INDEXSP:.INX), bottomed around July of last year.

In many ways, the best US sectors for playing emerging market stocks are energy and materials given that most emerging economies are largely natural resource and exporting plays. That, in turn, means that if one is making an active tactical bet on cost-push inflation, energy in particular should be on your radar.

Note that the ratio (see chart) has been bottoming for the last several weeks. Should this hold, I suspect it will coincide with an emerging markets melt-up and another broader push higher in equities.


Click to enlarge

Editor's Note: For more of Michael Gayed's thoughts on energy, check out this interview.

Twitter: @pensionpartners
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Michael Gayed: Energy Stocks May Signal Go Time for Emerging Markets
From the Buzz & Banter: It's time to watch for a change in leadership.
Michael A. Gayed    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

I continue to think that the energy sector is due for a period of leadership after more than three long years of relative underperformance.

Energy's behavior tends to be closely linked to that of materials, which relative to the S&P 500 (INDEXSP:.INX), bottomed around July of last year.

In many ways, the best US sectors for playing emerging market stocks are energy and materials given that most emerging economies are largely natural resource and exporting plays. That, in turn, means that if one is making an active tactical bet on cost-push inflation, energy in particular should be on your radar.

Note that the ratio (see chart) has been bottoming for the last several weeks. Should this hold, I suspect it will coincide with an emerging markets melt-up and another broader push higher in equities.


Click to enlarge

Editor's Note: For more of Michael Gayed's thoughts on energy, check out this interview.

Twitter: @pensionpartners
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

More From Michael A. Gayed
Daily Recap
Michael Gayed: Energy Stocks May Signal Go Time for Emerging Markets
From the Buzz & Banter: It's time to watch for a change in leadership.
Michael A. Gayed    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

I continue to think that the energy sector is due for a period of leadership after more than three long years of relative underperformance.

Energy's behavior tends to be closely linked to that of materials, which relative to the S&P 500 (INDEXSP:.INX), bottomed around July of last year.

In many ways, the best US sectors for playing emerging market stocks are energy and materials given that most emerging economies are largely natural resource and exporting plays. That, in turn, means that if one is making an active tactical bet on cost-push inflation, energy in particular should be on your radar.

Note that the ratio (see chart) has been bottoming for the last several weeks. Should this hold, I suspect it will coincide with an emerging markets melt-up and another broader push higher in equities.


Click to enlarge

Editor's Note: For more of Michael Gayed's thoughts on energy, check out this interview.

Twitter: @pensionpartners
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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