No Need To Be Singing The EM Blues
- rickstine
- Jan 27, 2020
- 1 min read
Emerging Markets are under pressure today for technical reasons - and because of concerns how the coronavirus is spreading in China and could impact the global economy. One commonly followed ETF that represents emerging markets is the iShares MSCI Emerging Markets ETF (ticker: EEM) and it is bearing a good piece of the selling action today because 34% of its portfolio is exposed to China (another 11% each to South Korea and Taiwan). With the Chinese, South Korean and Taiwan stock markets closed for their New Year's celebrations, this ETF becomes a way to sell on any concerns about the virus/economies.
Savvy investors will begin looking past this ETF for trading opportunities and Excalibur Pro is here to help. One of our tools - Relationship Building - helps discover which instruments have a strong or weak correlation relationship with an instrument you are following. With EM weakening, there could be pockets of opportunity in corners of the markets that may not initially come to mind. For example, cotton, palladium and platinum recently have had a strong relationship with the EEM ETF. How strong have those relationships been over the past six months? The Correlation Watchlist on Excalibur Pro can help you see which of those three has been the strongest over time (it's been cotton).
Comments