Chart of the Day - Thursday, November 19th, 2020

Today's Chart of the Day was shared on Twitter by David Zarling (@AdaptivCharts). It's a ratio chart of Emerging Markets vs. the S&P 500 over the past four years ($EEM/$SPX). David points out that Emerging Markets could be poised to outperform US stocks over the next few months. $EEM has already broken out to multi-year highs on an absolute basis. On a relative basis, It's breaking out from a multi-year downtrend with a bullish RSI divergence. In a comment to The Chart Report, David explained, "A large portion of $EEM is Asian Tech Stocks." The top four stocks in $EEM include Alibaba, Tencent, Taiwan Semiconductor, and Samsung. These four stocks represent over 20% of the ETF. David added, "If the US Dollar continues to break down here, it would only strengthen the bull case for Emerging Markets."