As The U.S., Grinds Higher
There were sharp gains during today’s session but behind the curtain, Emerging Markets (EEM), may be at the danger point.
Overall gains went from +1.68%, for the Q’s to a stiff +3.18%, for the SOXX.
That buoyancy allowed one to see EEM, was not performing in kind. Its daily gain was only +0.17% … way out of line from the rest.
That’s not the whole story.
The longer term daily close of EEM, shows the air’s been going out of this sector for a while.
Note the blue down-trend/support line and arrow; we’re at the danger point.
The second chart gets closer in on that area.
It’s clear, the market respects this trendline; no fewer than four direct hits and potential fifth (January 27th).
EEM: Going Forward
There may be more testing action at the underside or today’s test could be complete.
Wild percentage swings as seen today, are not the sign of a healthy market.
Even so, with all that upward action, EEM is weak and may be showing its hand.
Leveraged Inverse, EDZ:
Leveraged inverse fund EDZ, daily volume has picked up markedly over the past eight trading sessions.
Increased volume indicates potential opportunity; speculators are moving in and providing liquidity (not advice, not a recommendation).
At tomorrow’s session, a new daily low for EEM (high for EDZ) may be the signal, we’re headed lower … possibly verifying an EEM, downtrend line.
Charts by StockCharts
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point®, trade mark: No. 6,505,279