One of the more noteworthy developments in recent days has been the move in emerging markets, which has been under pressured by rising trade fears and a strong dollar. In Turkish Lira has lost at least 40 percent of its value in 2018 over concerns surrounding President Erdogan’s policies and the economy. Meanwhile, the Peso tumbled following report that President Mauricio Macri asked the International Monetary Fund for an early release of funds from the nation’s $50 billion standby financing deal last week. The iShares MSCI Emerging Markets ETF (EEM) dropped 1.9 percent to 42.33, down more than 10 percent YTD while the S&P gained over 8 percent over the same period. Now the question is whether recent selloff is a beginning of a bottoming process or there’re more pains ahead? 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 (weekly)
Our “U.S. Market Trading Map” painted EEM bars in red (sell) – see area ‘A’ in the chart. Over the past few weeks. EEM has been trending higher in a short-term corrective mode as it worked off oversold conditions. The mid-August rally ran out of steam just below the 20-week moving average. This week’s selloff pushed the ETF below the mid-August rising trend line, suggesting that the bearish flag pattern had resolved…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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