MSCI ACWI & MSCI EM

Markets have experienced sharp corrections in the past few months. After the weakness and major breakdowns there has clearly been technical damage on the price charts. Most important technical information is that almost all indices are now trading below their 200 day moving averages. Penetration below the 200 day moving average can be accepted as a short-term correction but if price stabilizes below the 200 day moving average this should raise a red flag and warn us of a possible change in medium-long term trend. Form the two MSCI indices above (MSCI All Countries World Index & MSCI Emerging Markets Index) we can say that price stabilized below the 200 day moving average in the past few months. 3 year-long uptrends are now damaged. However, we might be due for a rebound towards the 200 day moving averages. This could last for a few months. Positive divergence supports the case for a short-term rebound on the indices.