Emerging Markets, Breaking Down

Trend-Line, Confirmed

A new daily low for EEM, Emerging Markets, confirms the trend-line, outlined below.

Looking at the components of EEM, has it essentially a Taiwan Semi (TSM), and Tencent Holdings trade.

Taiwan Semi, topped-out mid-January, this year and has declined nearly – 25%, since its high.

Looking at the weekly chart of TSM (not shown), has it currently hovering right at support levels … possibly giving price action a positive bias.

Even though today’s action confirms the trend, we’re still at the danger point; just a little bit of a shove either way, can cause EEM to bounce higher or collapse.

EEM Daily Chart

At least six trend hits above, provide confirmation.

We’re about midway through today’s session and price could still make a recovery.

However, momentum indicators (MACD) on three time-frames are all pointing down: Monthly, Weekly and Daily, thus tilting probability for lower action.

The chart below zooms-in on the trend-line hits.

The low(s) of the wide bar from February 24th, are likely to provide some amount of support.

If price action continues its decline, expect some amount of hesitation or indecision in this area.

Summary:

It’s about two hours before the close and anything can happen.

Trendline contact(s) and momentum indicators all show probabilities favor the downside.

Similar to yesterday, U.S. markets are mixed-to-higher (but with those gains eroding) while Emerging Markets, EEM continues to show weakness.

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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