Emerging Markets Update – Is it time to buy EM/DM spread

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Emerging markets equities (EEM, quote) quickly have traded all the way down to near support levels on the spread to the SPDR S&P 500 ETF (SPY, quote) that goes back 5 years.

What are other investors thinking about emerging markets? After a dose of euphoria from the September Fed no taper, emerging markets have underperformed the SPY in 17 of last 20 sessions with a handful of days where the move was well past -1%.

The "EM/DM" spread is now at 13 RSI and within a whisker of the lows hit back in July and then again in August.

Despite the speculation of the USD going higher (my view) this is oversold territory and a place to trade the spread.

With the spread at .2309 I would be building a trading position with a stop at .2250.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

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