MSCI Emerging market has a stiff resistance at 45-46. It has been struggling to cross above it since 2012.
This time as everyone was getting excited about possible breakout above 45-46: there has been again strong selling from the resistance point.
MSCI EEM Monthy Chart
Brazil has been the big contributor in the sell off. I covered it few days back. Today, the selling intensified in India and China. So, it seems emerging markets are witnessing ETF style selling where everything gets sold off in the beginning.
What is driving the selling?
Nobody knows. We can invent reasons from technical to fundamental like Sell off from resistance, to Strong Dollar leading to outflows, to Slowdown in China to world adjusting to lower economic growth.
The Blogpost is purely for educational purpose.