Did Bernanke's comments signal a buying opportunity for emerging markets?
While the US Dollar pile on has minted many long forex accounts, I wonder if today's comments changed the playook in any way since Chairman Bernanke appeared intent on talking the US Dollar down with a carefully crafted statemet? Easing QE taperijng concerrns is quite profound. It certainly appears to back track from tapering being imminent so I am not sure the market will ignore this.
I wonder what this does for the emerging markets? Does it mark a trading opportuniity where EEM can begin to reassert itself again? Shorts have piled on this trade since June. A little short squeeze where they lose their grip and things could get very interesting. Tomorrow certainly will be I can say with more certainty.
Given the pressure emerging markets have been under ahead of the FOMC meeting, notching down his rhetoric about the US economy was not what the sell side expected. I added to my position at $39.88 today. We may see some favor return to this spurned group.
EEM is in the green on a decidedly negative day for US Markets. S&P being down .50%. A welcome divergence and perhaps even further indication that we are in the market throws of a mean reversion? Are there better trading days ahead for the emerging market investors? Today's action is encouraging.