By Shane Murphy, CMT

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Emerging Markets!

Emerging market stocks are shining in 2026. With the help of a declining US dollar, Emerging markets are +10% year-to-date. Absolute prices are breaking out to new all-time highs, and the relative trend (EEM / SPY) is displaying evidence of reversal.

The above chart displays the 15yr history of EEM / SPY. We’ve seen periods more recently (2017-18 and 2021) when the price ratio has appeared to reverse trend but ultimately failed to hold key technical levels. We’ll see how things resolve this go-around. Emerging market stocks making new highs is certainly “risk-on” behavior. The type of positioning investors take in a bull market!

Value + Momentum Blend

Two equity factors that work quite well together are Value and Momentum. It’s been noted by many that a blended strategy of Value and Momentum can at times outperform each individual strategy on both an absolute and risk-adjusted basis. When evaluating the ratio charts below, you can understand why.

The chart displays Momentum vs. SPY (blue line) overlayed with Value vs. SPY (red line). The Value ratio is set on an inverted scale. The lines appear to move with one another, meaning that in reality, when Momentum is outperforming the broad market, Value is underperforming and vice versa. This can help reduce portfolio drawdowns and subdue momentum price shocks we see far too often.

Gold vs. Stocks

I’m not big on price analogs – they aren’t valuable in my opinion, but man are they interesting. The below compares the Q1 1973 breakout of Gold vs. Stocks to the Q1 2026 breakout. In both instances, Inflation was cooling following a big rise in the preceding years. The Gold vs. SPY breakout occurs at this inflection point, where inflation re-accelerates and Gold prices soar over stocks. Will we see something similar this time around?

Shane Murphy, CMT has been a CMT Charterholder since 2022. He is currently a Wealth Management Associate at Michael Roberts Associates, Inc. where he assists in portfolio construction, investment research, and financial planning. Learn more at www.mraplanners.com or check Shane out on twitter @murphycharts.

Shared content and posted charts are intended to be used for informational and educational purposes only. CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. CMT Association does not accept liability for any financial loss or damage our audience may incur.