Interesting charts December 17th
Argentine Peso per 1 US Dollar – Mauricio Macri has followed through on his pre-election commitment to allow the Peso to float freely. With this realignment now out of the way international investors will be looking to see how other inconsistencies in the economy are tackled.
Global X MSCI Argentina ETF has been confined to a medium-term base formation since 2012 and found support today following a steep three-week pullback in anticipation of the currency devaluation. A sustained move below this week’s low would be required to question medium-term scope for additional higher to lateral ranging.
S&P 500 Equal Weight / S&P 500 – Thanks to a subscriber for this chart highlighting the underperformance of the equal weight index this year as breadth has deteriorated. The reliance of the broad market on the continued outperformance of a small number of mega-cap shares, many of which are already quite overextended relative to their trend means represents a headwind for equities.
