Is The Divergence Between Emerging And Developed Markets Flashing A HUGE Warning Sign?

Major Asian markets had a monster start to the week, but the story this year has been the big collapse in emerging markets, and the (still) excellent performance of developed markets.

Can this divergence last?

This chart from Doug Short takes a medium-term look at emerging markets vs. developed ones, and notes that the last time the line crossed below the 200 day moving average like this, developed ones began to tank. Granted, that’s just one data point, so as Short argues it’s just something to watch at this point.

Click to enlarge.

emerging market

Photo: Doug Short

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