Meanwhile … Emerging Markets

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).

Summary:

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.

Stay Tuned

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

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