Excellent! This is the exact sort of analysis I was hoping for. I like the suggestion of specific vehicles to trade. Thanks for the wonderful product.

great insight same here.

In other talks Raoul has said he likes India as a long today. When you say to avoid EM long, does that include India ?

Another question - you talk about EM equities and currency risk. What are your thoughts on EM dollar denominated sovereign debt ?

Any chance you could look specifically at Hong Kong equities? The stock connect program allows PRC institutions to send money overseas now- the money actually stays in China, but they can diversify. Huge amounts of money preparing to come in from the mainland, plus on the international side global funds are still very underweight.

Thanks Julian, very insightful piece! Looks like the MSCI EM INDEX (MXEF) is potentially breaking out from a 8-9 yr downtrend. I guess we will wait to see if it can break the trend line on a monthly close, and how price reacts at your defined resistance at the top of the 2012-15 range .

Won't be so bearish for now as EM is breaking out and virtually flat for 10Y + CRB index making new high and USD weak as FED is dovish AUD bouncing along Iron Ore. all this factors don't point for a sizable correction

Great project! Really excited! I would like to hear more on your long term India investments. If you could fit that in at some point it would be great.

I'm curious about your thoughts on E.M. On the African continent, seems to have serious value as an investment

Echo on Don's comment. This and Raoul's Dollar report are exactly what I hoped RV MI would be when I signed up today. This report is entirely logical to me. I would note that China (KBA, FXI, HAO, KWEB) have all broken out. What would make these a failed breakout? Thanks.

JULIAN: Points raised and Questions posed below. Would be nice to receive your additional look and feedback to the forum here... Thank you for your piece. JULIAN, I've also been tracking/trading off the longer term chart weekly view of EEM and it's clearly been in a downtrend channel since 2010 hitting the top twice and bottom also twice which I don't think was pointed out in this piece. Playing off that channel trade has worked out well and I exited at the top of that channel in keeping with that trade approach recently several weeks ago. And the latest rally took it to the top off the inverse H&S JULIAN noted, however, it appears to have somewhat convincingly broken above the downtrend channel now after forming a bull flag just underneath it during May and June this year. Also, I have been previously noticing there "may" have been a much larger rightward downsloping inverse H&S pattern at play here. Take a look at the Sept 2014 thru April 2015 price action ( L shoulder ) and the August 2015 thru July 2016 price action ( H ) and finally the August 2016 thru March 2017 price action ( R shoulder ). The recent bullish break out above the long term downtrend channel perhaps to add quite a bit of credence to this much larger inverse H&S pattern? So far the recent break out seems to be holding well and the weekly MACD ( or PPO ) indicator appears to be supportive of this price launch thus far ( sloping upwards and no negative divergence profile from what I see - the signal line has just crossed again over top of the PPO and both lines are upwards sloping and above the previous waves up in the overall MACD ( PPO ) since it double bottomed between September 2015 and February 2016. So I'd really be interested in JULIAN's view of this. The point being in my mind that if/when EEM retraces back from it's recent break out that it could "simply" head for a back test of the downtrend channel break out which, depending on how long that might take, provide price action with some pretty good price support running from the $41.50 to the $40.00 level which if successfully holds could launch EEM quite a bit higher. This back test of the break out could might serve as a rational risk/reward entry into the bigger picture trade should one want to enter or re-enter ( with associated stop in mind or in place of course ). So, despite the divergence with EMB and Commodity performance, could EEM potentially, on this most recent longer term price action down channel trend bullish break out, in and of itself, be signaling something transformative in terms of the EMB and Commodity themes? Also I'd just like to point out in terms of the inverse ETF play ( and apologies if this is common knowledge within these circles already but many people don't realize it so I'll point it out ), for anyone who is looking to play any of the inverse ETF's ( like the one JULIAN noted in his piece the EUM ) to keep in mind the "decay" which inverse ETF's experience. If one is in an inverse ETF and even if the underlying trades sideways the inverse ETF over time will experience price "decay" ( i.e. decline in price ). If the underlyng actually goes opposite ( i.e. in an unfavorable direction to your inverse ETF position ) then it gets even worse since not only will the inverse ETF lose commensurate value as the underlying goes against you but also the inverse ETF will the entire time experience on top of that the effects of "decay". The "decay" over time in any inverse ETF comes from the underlying mechanisms that an inverse ETF must employ to provide returns or losses opposite the underlying. And perhaps, needless to say, if one engages in any of the leverages ETF's ( in these cases either inverse or straight ) this whole "decay" reality multiplies exponentially over time. Just take a look at any longer term chart of any inverse ETF who's underlying has either been going sideways or up and you will see the shape of a hockey stick. So when using them it's extremely important to be patient and have a very strategically and tactically pre-planned "tight and light" approach. Thanks

JULIAN: To add to my comments and analysis below in the earlier thread I posted ... interested in your thoughts and views on this. Since my comments posted last week EEM has continued to remain strong and really looks like a break out under way. of course there is major horizontal resistance at the 46 zone as Julian indicates but in keeping with my technical comments above even if price stalls out there it might be just a time out to build an even more compelling looking Right shoulder in the of the larger inverse H&S pattern I outlined might be in the cards. The current beak and continued stick above the downtrend channel though is certainly giving the bullish case more credence and potential for the larger H&S to come into play of course. How do you see this at this stage since your piece was written and published? On a side note, many times I've observed what seem to be a series of different sized and shaped nested and evolving H&S patterns and inverse H&S patterns around market tops and bottoms across different time frames. Almost seems to be indicative of the battle between bulls and bears as they duke it out before one side wins and the other side loses. Based on your vast array of analytical and experiential observation does this observation hold any water in your view? Thank You

Julien, concerning this years divergence beween between EM and commodities I've recently read a comment from John Murphy. He is pointing to the fact, that the technology is also heavily weighted in the EM indices. Looking at the EEM-ETF Information Technology ist weighted over 25%; regarding the distribution by country over 55% come from China, Taiwan and South Korea. So may be the technology sector is contributing to the rise in EEM; potential future weakness in this sector may contribute to a correction in EEM. Anja

Hi Raoul, PMI's uniformly seem to be coming off highs, GDP's rolling over, long term charts; copper, oil, soybeans in downtrends. Is this transitory or are we setting up for next recession now??? How does this play out for JB's view of higher inflation and yields?? Thanks.