Emerging-market assets were under severe pressure on Monday as Turkey’s currency crisis continued to stoke fears of spillover effects. Turkey’s lira was trading at fresh all-time low against the U.S. dollar, after shedding some 14% of its value at the end of last week. After a strong run of outperformance in 2017 that saw the iShares MSCI Emerging Markets ETF (EEM) soared more than 34 percent, the ETF fell 1.64 percent to 42.48 Monday, down nearly 10 percent YTD. Now the question is whether recent selloff is a pause that refreshes or it’s a beginning of something worse? Below is an update look at a trade in EEM.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.
Chart 1.1 – iShares MSCI Emerging Markets ETF (daily)
Our “U.S. Market Trading Map” painted EEM bars in red (sell) – see area ‘A’ in the chart. The first dominant feature on the chart is the rising trend line starting in early 2016. The second dominant feature of the chart is the downward trend since early 2018. The late June oversold relief rally ran into resistance near the 20-week moving average. This week’s downside follow-through confirmed last week’s bearish breakdown…Click here to read more.
You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.
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