Emerging Markets Vs. S&P 500

Here is a 2 year chart of the EEM, emerging markets ETF vs. S&P 500.  The divergence is getting out of hand.  But I still believe EEM lags for most of the year just like Europe did in 2011.  Europe only started to outperform the U.S. after a gigantic slow motion crash in August.  Something similar should happen with emerging markets which should trigger a similar drop close to magnitude of 2011.
















With today's weakness, my approach will be different going forward.  I will be more aggressive on the short side on one to two day rallies.  Look to play a range from 1870 to 1840, until options expiration on March 21.  I will buy dips at 1840, and sell rips at 1870, not in S&P, but a proxy, like EEM or FXI.  After that, I expect a down move in earnest later this month or in the beginning of April.