Always consider hidden risks
Emerging Markets: Back at the 50% Fibonacci Zone?
March 21 2016 ( From TradingView )
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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 still unable to break that Major Resistance Trendline that started back on December 16 2014 (See First Chart Below - Thick Red Trendline - Ellipse) and so close to the 200 DMA (Day Moving Average - Green Line). (See First Chart Below - Ellipse)
Also quite interesting is the behavior lately of the EEM and US Dollar Index (DXY). The EEM is outperforming when DXY is strong and vice versa... The Break Down of the US Dollar Index on March 17 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 near retesting the 50% Fibonacci level 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) broke a Major Resistance Trendline on the week of March 14 2016 from a Major Falling Wedge that started back in May 2010.
(Red Trendline - 5th Chart Below - Ellipse). No coincidence in those Financial Markets.
iShares MSCI Emerging Markets ETF (EEM) ( DailyCandles / Right Scale )
Emerging Markets: Back at the 50% Fibonacci Zone? $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)