MSCI EM (Emerging Markets)

While European countries are trying to come up with a good plan to save the euro zone, 6 central banks around the world  the Federal Reserve, European Central Bank (ECB), and the central banks of Canada, U.K., Switzerland, and  Japan decided to provide “temporary U.S. dollar liquidity swap arrangements.” Those  dollar swap lines and programs are authorized through 1 Feb. 2013. This definitely helps the equity markets and could be seen as a “monetary easing”. While collective central bank move can have both positive and negative implications, the impact on the equities hasn’t been big enough to change the technical outlook. MSCI EM index is possibly completing a sideways consolidation below its 200-day moving average. Once completed, a breakout should take place. Given that this consolidation is forming after a downtrend, I would expect a resolution on the downside which should eventually break below 850 levels. Though we need to see a confirmation. Intermediate/long-term bearish outlook remains intact.