Commodities, Currency

What is this spreadsheet telling us?

Nothing much has changed from last week. The emerging market currencies have been outperforming US and developed market currencies, and the currency strength has been pushing the emerging market stocks to the top of the leader list.

But, I have to question whether investing in emerging market stocks is a good idea when most of the commodities are so weak. Or maybe the emerging markets are evolving and offer more than just commodities at this point.

The dollar is very close to its uptrend line. Keep an eye on this. The dollar seems to be finding support at this level.

Below is a seven-year, monthly chart of Martin Pring's inflation/deflation ratio. It doesn't look to me like it is headed higher anytime soon.

The Short-Term Trend

Sometimes, I am not really sure how to define the short-term. The PMO certainly looks like an uptrend, but the SP1500 looks like a bounce.

The Leader List

ILF showed very poor follow-through today after bumping up into the leader list yesterday.

In fact, most of the foreign ETFs were under pressure probably due to the strength of the dollar as it bounces off support.

If the dollar holds at support, we could see an important trend change in which the foreign ETFs weaken and the US ETFs strengthen.

I have marked the ETFs that showed strength and weakness today.