Lets get short EM equities. We've seen a rally off the June lows in several EM stocks and a bounce in a bear trend is usually an opportunity to sell. So, lets get short. Timing seems about right after a solid NFP and the US once again demonstrating signs of outperformance. The first down the hole is also the first to come out. FIFO as they say (first in first out) in geeky terminology. This makes us think about EM because they haven't even gone down the hole yet. Still to come, watch this space.
Do place tight stops though. These are volatile times and the risk is that a spurt of US optimism demonstrated by the Dow strength carries EM higher. A rising tide lifts all boats. For now, the tide is likely not strong enough.
By chartonomist.
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