Emerging Markets Giving the Finger to a Correction

After reaching a new 20 month high with a strong move on the 15th, Emerging markets have held strong. While the the S&P 500 has had a minor set back since then, dropping as much at 3%, Emerging Markets have refused to budge. In fact the chart below of the recent price action almost looks like it is giving the rest of the equity world the middle finger. The big pullback day March 21st left Emerging Markets holding at their highs, while the S&P 500 and other US Equity Indexes were confirming a short term downtrend. That long red candle sticks out doesn’t it?

As sentiment continues to be a drag on the market how do Emerging Markets look to fare? Will they continue to give the finger to the rest of Equities, or will the weight of the world drag them lower as well? The chart above certainly shows strength. The RSI is bullish and strong, moving sideways without any retreat while the MACD levels, without any pullback at this point. And the Point and Figure chart below agrees.

Point and Figure charts take out the time element and focus only on price. This one suggests that there is upside to near 48 on the current move. This fits well with the Measured Move out of the current consolidation on the first chart which would give a target to near 43 on the next leg up of a possible 3 Drives. Equal legs would put the 3rd leg then near 47. Emerging Markets seem like a good place to be for now.