SARS. Swine Flu. Covid-19. All 3 Were a Screaming “Buy!”

December 31, 2020

By Elliott Wave International

– Let’s take a moment to update you on the relationship between COVID-19 and emerging market stocks. Earlier this year, our publications at Elliott Wave International showed that infectious disease epidemics tend to occur toward the end of bear markets. We cited such examples as SARS, swine flu, and COVID-19, which spread toward the end of major declines in the MSEI Emerging Markets Index.

MSCI Emerging Markets Index

We then used that knowledge to support a bullish outlook following the March 2020 lows. For example, our Global Market Perspective and Asian-Pacific Financial Forecast, monthly Elliott Wave International publications which provides in-depth coverage of 50-plus worldwide financial markets, said that “epidemics tend to occur toward the end of bear markets. Asian-Pacific and emerging market stocks should now embark on a bull market amid the COVID-19 pandemic.”

MSCI Emerging Markets Index

And that forecast has proven spot on as the MSEI Emerging Markets Index has since risen 50% as seen in the chart below.




MSCI Emerging Markets Index

The question now of course is whether the bull market is near its end or whether it will continue.

You can find the answers to that question written as clearly as our April 2020 forecast for free right now.

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This article was syndicated by Elliott Wave International and was originally published under the headline SARS. Swine Flu. Covid-19. All 3 Were a Screaming “Buy!”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.