Traders,

American equities have been trouncing their foreign counterparts for over a decade. So much so that many wonder why investors should even bother with overseas companies. But a longer view reveals that the pendulum eventually swings back to favor foreign companies.

Today’s chart tells the tale with a ratio chart of Emerging Markets vs. the S&P 500. When the line rises, emerging market stocks (think Brazil, India, China, and the like) outperform. When the line is falling, U.S. stocks outperform.

The past 12 years have seen a massive gulf between the two. Emerging markets are up 28%. Meanwhile, the S&P 500 has more than quadrupled! This has led to a large discrepancy between valuations.

EM is cheap. ‘Merica is rich. If you’re shopping for discounts, take a good look at EM.

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Video Of The Day: Jedi Options – Building a Swing Trade Using a Call Option on a Bear Retracement Pattern

In today’s Jedi Options, Coach Tyler explains how to build a #SwingTrade using a call option on a bear retracement pattern.

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Chart of the Day: Emerging Markets vs. S&P 500

America’s dominance over foreign stock markets is getting long in the tooth. A peak in the dollar could be a catalyst for the long-awaited reversal.

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Options Theory Blog

Sell 1 Naked Put or 3 Bull Puts?

Should you sell 1 naked put or multiple bull puts? Bull puts are cheaper and deliver a higher return on investment. But you get less credit than a naked put. So, why not sell multiple bull puts?

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Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

Cash Flow Club Replay

If you missed last night’s webinar with Coach Greg Holmes where he talked about Naked Puts or would like to watch it again, check it out here.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.

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