Click to enlarge imagesThe Australian dollar continues to work its way down the retracement profile of its historic waterfall decline from 2008 and 2009.
The bigger picture, and one that we have not viewed as bearish towards risk appetites in general - is that the torch is now being passed back from the US to those regions that have underperformed over the past few years - and that have stoked world-wide growth and reflationary trends higher.
Although the Shanghai Composite Index has recently been rejected by overhead resistance - we anticipate the next drive higher will break through.
We still like Europe, namely Spain - but as shown below in our IBEX comparative from this summer - the lions share of this breakout leg has been captured. We anticipate emerging markets and China to outperform over an intermediate time-frame (~ 3-6 months).