Doctor Copper needs to make a house call to the emerging markets and he needs to prescribe ‘bullish’. MSEMF (lower panel) looks like it is in some kind of a massive topping pattern (it does not look like a bullish consolidation to me) and the problem is that the good Doctor is making the same pattern.
The potential is for a 2008 style deflationary Armageddon in commodities and emerging markets. Now, would the US (and maybe Europe), with their respective funny munny financial chicanery get off scott free, perhaps even getting the big bid as the world rushes out of commodities and EM’s? Well as obnoxious as it sounds, it could happen. Though I wouldn’t bet on it.
Imagine the world rushing to T bonds, amplifying the Fed’s current operation. Imagine US mortgage rates tanking. Imagine the shining new era of Fortress America and its financial apparatus. What was the last ‘new era’, the Dot.coms and the ‘new economy’? Could we have a new one that rejects the old fashioned notion that the US stock market has a copper roof? Sort of the modern edition of the circa 1999 rejection of a ‘brick and mortar’ business model?
Just riffing here. I think commodities and EM’s are a bearish divergence to the US and Europe. But unfortunately, with the Fed in the markets 24/7 now these type of questions need to at least be considered.