This Market Decline Is A Gift To Get Involved

By Bryan Rich

November 1, 5:00 pm EST

We talked about the potential bottom in stocks on Monday, based on this big trendline we had been watching.  That, of course, also coincided with a similar line in the Dow, which represented a 10% correction on the nose.

That indeed does look like the bottom.

You can see in the chart of the S&P 500 above, this big line dating back to the oil price crash lows of 2016 held beautifully, and we are now up more than 5% from just Monday of this week.

And today we have this …

We’re getting a break of this sharp downtrend of the past month (circled).

And we have a very similar pattern in Japanese stocks (the Nikkei).

Most importantly, the biggest mover of the day in global stock indices (and nearly all markets) was emerging market stocks.  The MSCI Emerging Markets Index was up 3.3% today.  And the strength in emerging markets was well underway before the news today that the U.S. (Trump) and China (Xi) has some constructive talks on trade.

What gets hit first and hardest when global risk elevates?  Emerging markets.  EM was down 21% on the year earlier this week.  But this is also where the biggest gains can come as the dust settles, and people realize that a hotter U.S. economy, will translate into hotter growth in emerging markets.  As I’ve said, this market decline has been a gift to get involved.