With Emerging Market investors, the recent trend has been nothing short of "where ya been for the last three years?" Emerging Markets are having their best run since March of 2011 in terms of outperforming the US and developed markets.
EM has rallied +10.7% off the bottom of March 13th. Here are some more stats that are telling:
- +4% relative to the SPX in last 3 days
- outperformed SPX 16 of 19 days
- the spread is at a 9d RSI of 84.
This spread may indeed be overbought in the short run but still has a lot of room to normalize after 3.5yrs of underperformance.