EM On The Edge: Record Buying Meets Rising Oil And Exploding Vol

EEM on the edge

EEM is sitting right on the major trend line and the 10-day moving average. A slightly lower close could turn things much uglier fast. The 200-day moving average remains far below.

Source: LSEG Workspace

 

EM stress

VXEEM has surged past the VIX. No bueno.

Source: LSEG Workspace

 

EM downside stress

Put call skew for EEM has exploded to the upside.

Source: GS

 

Oil drag

There is obviously much more to the EM case, but the surge in oil prices is a big headwind.

Source: LSEG Workspace

 

Size buying

Global emerging market funds are buying EM equities at the fastest annual pace in two decades.

Source: GS

 

Everybody wrong

EM is a classic mean-reverting market. Consensus turns extremely bearish at the bottom of the range and very bullish at the top. Was this just another fake breakout?

Source: LSEG Workspace