Emerging Markets Update – Is It Time to Buy EM/DM Spread - InvestingChannel

Emerging Markets Update – Is It Time to Buy EM/DM Spread

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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