Shanghai sold off -2% overnight, adding to a -3% decline on Tuesday. Russia opened weak on news of a credit downgrade. Brazil was pressured by continuing weakness in oil.
EEM (Emerging Markets), RSX (Russia), CAF (China ‘A’ Shares) and EWZ (Brazil) have had (and still have) no shortage of reasons to sell off. They’ve recovered from the mid-December washout lows and are holding up nicely. Seasonal bias (which generally refers to the last 5 trading days of December + the first 2 in January) turns positive today.
- Opened CAF (China ‘A’ Shares) @ 27.7x.
- Opened EWZ (Brazil) @ 36.2x.
- Opened RSX (Russia) @ 15.5x.
- Opened PBR (Petrobras) @ 7.5x.
- Opened GDP (Goodrich Petroleum) @ 4.9x.
- Opened RYWVX (Rydex 2x Emerging Markets) at the 1030 est window.
Why the obsession with Emerging Markets? The US indexes are likely in the later innings of their bull run. For emerging markets, it may be only the bottom of the first.
(Note that UGAZ declined another -11% today. That's an extreme, 'off-Desolation Row' kind of negativity. It ends at some point, but no longer a candidate for trading until a bottom is in.)