The Lead-Lag Report: Emerging Rotation
While corrective risks remain in the US, the rotation in emerging markets appears to be getting started in a very real way. Could this be the early set up for the Fall Catalyst of 2012 of new all-time highs led by overseas assets?
Small-Caps (SLY) – Support?
Comments: Small-caps continue to underperform, nearing a relative support line. It remains to be seen if support can hold, but this relationship is an important one to focus on. A breakdown would be an important event which could mean the top is in for markets.
Technology (XLK) – Crash
Comments: Technology has essentially crashed relative to the S&P 500 (INDEXSP:.INX) on Apple (NASDAQ:AAPL), IBM (NYSE:IBM), and Google (NASDAQ:GOOG) earnings news hitting mega-cap companies. The trend remains down and severe weakness could persist into earnings season.
Rotation into emerging markets continue to be the most bullish part of intermarket trend analysis now, as the U.S. appears more likely to correct than overseas risk assets. The shift into emerging markets is important to pay close attention to independent of how deep U.S. equities can go in the very short-term.
Editor's note: This update is published every week exclusively for Minyanville, and is compiled by Michael A. Gayed, CFA, Chief Investment Strategist of Pension Partners, LLC.
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.
Daily Recap Newsletter