Gavekal Capital: AD Ratio Diverging Among Regions - Asia Is Improving and North America Is Deteriorating

Monday, May 5, 2014

AD Ratio Diverging Among Regions - Asia Is Improving and North America Is Deteriorating

The 200-day moving average of the Advance/Decline Ratio are showing some significant divergences among regions in the MSCI World. On the positive side the AD ratio has significantly improved for MSCI Asia-Pacific since September 2013. The AD ratio has converged back towards the price series. Meanwhile in North America, the AD ratio is making 4-year lows. Overall for the entire MSCI World Index, the AD ratio has held relatively steady for a year.

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Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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