The U.S., the largest economy, was once the growth engine of the global economy, and Wall Street was the bellwether of the global stock market scene. Since the 1970s, we have heard the saying, "When Wall Street sneezes, Asia catches a cold." When conditioned by historical experience, it takes reprogramming for ingrained behavior to change. Many investors still regard major developed economies, led by the U.S., by virtue of their size and diversity, to be more insulated from global events, and their stock markets to be safe havens, while emerging markets are riskier. But are they really?

The last few major financial crises with global seismic impacts-the IT bubble of 2000, the 2008-09 financial meltdown (of the shadow banking sector) and the 2010 eurozone sovereign debt crisis-all owe their origins to the developed world. Thus, the perceived safe haven status of developed markets is illusory.

Eoin Treacy's view Fullermoney has stated a preference for a progressing versus regressing markets designation since at least early 2008. It has long been our opinion that the developed versus developing designations were outdated. They are simply inadequate to describe the leap in economic and corporate governance made by Asia and Latin America. This is particularly the case when compared to how poor regulation, board room avarice and fiscal irresponsibility have plagued much of Europe and the USA.

Much of Asia and commodity producing Latin America has performed impressively since early 2009 and has led Wall Street to the upside. This is at least in part because the growth of the global consumer is focused on these regions and is a secular theme. It is likely to continue provided the global economy remains on a relatively sound growth trajectory. Oil prices currently offer a headwind but once this impediment is removed Asian and Latin American markets are likely to be among the first to rebound.

The MSCI Far East ex-Japan Index and the MSCI Latin America Indices have comparatively similar patterns. They have both been consolidating above yearlong ranges since October and have both completely unwound overbought conditions relative to their 200-day MAs. Sustained moves below these trend means would be required to question medium-term scope for additional upside.