With the ultimate confirmation of the new secular bull market in emerging markets we are proud because we saw this coming more than a year ago. It is not too late though as the emerging markets new bull market which got confirmed in the first week of 2018 has much more upside potential.

Let’s briefly go back in time, and verify what we observed and read into emerging markets charts:

  • Already two years ago (February 2016) we signaled a high probability of emerging markets outperformance: Moment Of Truth In Emerging Markets Which Could Become A High Leverage Play. We concluded “If both crude and emerging markets succeed their current test, we would expect to see fireworks especially in the short to medium term in emerging markets” which was right at the time global stock markets were breaking down and the whole world was preparing for a 2008-alike collapse.
  • We followed up one month later with Is It Time To Buy India Or Other Emerging Markets? in which we identified India as the top emerging market “We are excited by India’s outlook, and believe it will break out big time in 2016.”
  • In our Emerging Markets Forecast for 2017 we recommended to watch the U.S. dollar for an assessment on emerging markets. As the dollar did not break out it implied green light for emerging markets. This is what we wrote more than a year ago: “For 2017, our emerging markets stocks forecast really depends on what the dollar will do at current price levels. The dollar is about to break out now. If strength continues in the dollar, we see EEM decline to 28, its support area. We cannot image EEM to fall lower, so 28 points is our worst case scenario.” What a great entry point was 28 points in EEM ETF which is now trading above 49 points (one year later).
  • A little bit less than one year ago (April) we explained our strong belief that emerging markets will be strongly bullish In 2018. Note: this was nine months before 2018 kicked off.
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