This week's chart is a check up on our rebound trade from 11 months ago...Back in December, we introduced the idea of buying beaten-down emerging markets, like Brazil and India. These markets were among the hardest-hit assets during the 2008 crisis... so we bet they offered the biggest rebound potential.
As you can see from this week's chart, our rebound thesis was spot-on. The big emerging-market fund (EEM) is up 91% since our commentary. So what does one do with this rebound trade now?
Easy: Keep in mind stocks have enjoyed a big run higher... they aren't cheap by any measure... and there are plenty of big economic problems to work through. But also keep in mind Jim Rogers' wisdom, "Markets can often rise higher than you think is possible."
The simple fact is, governments are doing everything in their power to support stock prices. Plus, the all-important trend is up. For you longs: Keep a profit-taking stop loss in place and enjoy the trend.
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