Gavekal Capital: (More) Internal Incongruity

Friday, April 25, 2014

(More) Internal Incongruity

The number of cumulative new highs in members of MSCI Europe has fallen pretty steadily since March, all while the index itself continues on a steady path upward:


Given the high degree of correlation in the past, we have to ask ourselves: will the number of new highs rebound or will the index retreat?
For more on disturbing divergences we have noticed in our work, please refer to this summary of our quarterly conference call, held yesterday.