Emerging Markets have rallied 9% in 24 days and sits near key resistance on the iShares MSCI Emerging Markets (EEM, quote) at $41.00 and 1000 on the MSCI EM.
We think the recent outperformance to SPX is about currency resilience and China (FXI, quote) outperforming. Both will continue to surprise.
Emerging Markets have outperformed the SPX by 6.4% in last 21 days from the bottom of this spread.
There is enormous room for this spread to continue to move but not calling for a straight shot in fact key resistance on the spread in line with that on the aforementioned indices.
Watch .2000 on the spread for headwinds.
