Always consider hidden risks
Emerging Markets (EEM ETF): Testing a Major Resistance?
June 7 2016 ( From TradingView )
If you would like to receive our free daily markets updates, please Sign-up
A few charts below are worth a look: the iShares Emerging Markets
(EEM ETF in Candles - First Chart Below) compare to the iShares Core SP500
ETF (IVV in the charts below showed in Bar Chart)...
EEM is underperforming Tremendously since October 2010. EEM
(on a relative basis - ratio of EEM over IVV) is still within a huge downward
channel that started on October 2010. Last time we reached
those levels on a Relative Basis was back September 2004.
(See Second chart below - Candles)
First sign of reversal on a relative basis will be when the 50 DMA (Day Moving Average - Red Line) will cross above the 200 DMA (Day Moving Average - Green Line). (See Second Chart Below - Ellipse)
But the Real Major Reversal will be when we finally break the downward channel on that ratio that started back in October 2010.
(See Second Chart Below)
EEM have been in a painful grind compare to the SP500 Index since January 20 2016 and now testing the Resistance Trendline from a Minor Downtrend Channel that started back on April 7 2016 (See First Chart Below - Channel - Ellipse) and now above the 200 DMA (Day Moving Average - Green Line). (See First Chart Below - Green Line -Ellipse)
Also quite interesting is the behavior lately of the EEM ETF and US Dollar Index (DXY). The EEM is outperforming when DXY is weaker and vice versa... The Downtrend of the US Dollar Index since June 1 2016 did help tremendously the EEM cause... (See Third chart below - Ellipse)
But one interesting technical factor is that we are still into that Weekly Downtrend Channel but more importantly that we are now at the 50% Fibonacci zone at 34.33 (that goes back in November 2008) ;
a crucial technical Weekly test for the EEM ETF indeed. (See 4rth Chart Below - Ellipse)
And all that happening when the Emerging Market Currencies (CEW ETF) are testing a Major Resistance Trendline of the week of March 09 2016 (Grey Trendline - 5th Chart Below - Ellipse). and near testing the 200 DMA (Day Moving Average) on a relative basis (ratio EEM ETF over IVV ETF) (See Second Chart Below - Green Line -Ellipse)
But the real interesting part is that as we are in the process of testing that Daily Major Resistance from a Downtrend Channel that started back since April 28 2015 on that EEM ETF.
(See First Chart Below - Daily Downward Channel - Ellipse)
iShares MSCI Emerging Markets ETF (EEM) ( DailyCandles / Right Scale )
Emerging Markets (EEM ETF): Testing a Major Resistance? $SPY, $EEM #Trading #investing #eem #SP500
iShares MSCI Emerging Markets ETF (EEM) over
iShares Core SP500 ETF (IVV)
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
EEM (Top Panel)
EEM over DXY (Middle Panel)
US Dollar Index (DXY - Bottom Panel)
iShares MSCI Emerging Markets ETF (EEM) (Weekly Candles / Right Scale)
CEW ETF (Wisdomtree Emerging Market Currency - Candles Daily)
EEM ETF (iShares MSCI Emerging Market - Blue Line Daily)