Its very easy to read research papers from Wall Street firms or hear money managers on CNBC tout that the real growth story continues to lie in the “Emerging Markets” arena.  They may be correct in the longer-term, yet the Power of the Pattern reflected that bearish rising wedges were taking place all around the world a year ago (see Look alike patterns here)  and that the Shanghai flag breakdown should hurt the Emerging markets arena  (see Shanghai post here) 

What has ownership of the Emerging markets countries done for a portfolio over the last year?  Lowered returns!


The 6-pack below represents Emerging/BRIC ETF’s and their price struggles since large bearish rising wedges took place a year ago.


Two-thirds of the time multi-year rising wedges take place, prices move lower into the future.  Emerging markets continue to struggle in price after breaking below rising wedge support, as they create a series of lower highs.  The BRIC countries might be the growth engines of the future, yet over the past year, they’ve be a real drag on portfolio performance

 The key for this arena going forward….watch for bullish falling wedges to form.

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