Most world markets gone nowhere since 2008in this chart we look only at EM charts, and notice India and Indonesia are the exceptions as most markets still below 2008 in dollar basis... this is true not only for EM but for the utmost majority of markets in the world.
few other exceptions i found are germany, switzerland, korea, japan, denmark & netherlands...
EEM
NIFTY500 may outperform the S&P500
RSI has shown a descending triangle - upward breakout
TSI has already given a +ve crossover and now has moved over the 0 line
Similar signal in KST Indicator
Waiting for action signal on NIFTY500 is must before long entry is made
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EEM Possible BreakdownEEM is looking weak at the bottom of this range its been in for a few weeks, if market sell of continues we may see this break below 49/48.75 which is a clear break of the channel support. Next key level below 46.25, may see sell off to this level before prior bulls come in to defend.
Emerging Markets Indicates Deeper Correction On StocksHello traders and investors!
Today we want to show you an interesting chart with clear Elliott Wave pattern suggesting deeper correction, which may have an impact on stocks across the globe.
We are talking about Emerging markets (EEM), where we clearly see a completed five-wave cycle from March 2020 lows following by bigger and deeper (A)-(B)-(C) correction. As you can see, after we noticed a bearish triangle pattern in wave B), we can now see it breaking even lower, ideally for wave (C) that can send the price down to 42 support area.
If that's the case and EEM goes sharply and impulsively for wave (C) then be aware of a bigger decline on stocks now at the end of the year.
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DXY threatens the marketsWell the DXY is again entering the area of extreme overbought and threatens to bring down not only commodity markets but also the global trade.
To be fair, this situation has been going on since late 2014, when a period of expensive DXY came, which led to pressure on commodity prices and frozen EM and is gradually coming back to the US through high inflation. Thus, a DXY slowdown is needed to save the Christmas rally.
The Ending of an Era - HSIOriginal Chart This is Based Off
2018 update
Original Trade Strategy Around This Chart
Everything should be self explanatory in the chart. Of course - this will work until it doesn't, but since the 1990, the HSI index hitting its upper resistance line has nailed every major global market top within a very short timeframe. You can see how perfect this has timed markets with the correlation to the SPX index in the lower chart. Hypothetically speaking, when you would hit the upper resistance line, you would short emerging markets to hedge against whatever is about to happen. Then when this hits the lower resistance line, you would go long major market indexes until you arrive back at the upper resistance line (SPX, etc).
2022 - End of an Era?
As most can see, this chart is a very very long narrowing wedge / channel. The volatility between drawdowns and rises was far greater the further back you go, and the drawdowns have all been proportionally smaller as we narrow within the channel bouncing off top and bottom resistance (and sometimes in between). With that said, narrowing channels like this indicate increasing fragility of the trend, and potentially suppressed volatility. Eventually, something has to give, and this will break the long term pattern.
I believe we're close to that point, and that's not a good sign for asian markets. I don't know exactly what would happen if this breaks to the downside, but I don't think it would be pretty. Stable systems such as this have a way of becoming extremely chaotic when the stability breaks. Chaotic markets = drawdowns / crashes, and given the current state of Chinese markets and politics, this shouldn't be too surprising that it could be possible. The ongoing Chinese real estate crisis is just getting going, and the party has so far remained committed towards deflating their real estate bubble. Fundamentally, Hong Kong is just as bad if not worse than China from a real estate speculation / valuation perspective, yet there are additional problems in HK with people fleeing the territory due to the Chinese takeover following the 2018 protests. Demographics are strongly against this market, valuations are strongly against this market, and the current economics of this look rather dire without any major positive windows into future development / growth.
From a technical perspective, this is also far weaker than every other time it's hit the bottom resistance line. Note that every other instance we hit the lower resistance line, we also were hitting the lower monthly bollinger band at the same time. Not included within the chart, but momentum indicators also are showing a lot of negative divergences. You can see this from simply looking at the chart and noting the covid recovery bounce has been far weaker than every other post-lower boundary recovery bounce. We didn't even make it up to the middle resistance line before retesting.
My guess and view is that this won't break easily, but it will break dramatically. I think there is a good chance we see another rally here back towards one of the resistance lines, but after that, momentum will have really worn off. I also think we could chop around the lower resistance for a while, but ultimately, we are likely going to break down here on a secular basis. Maybe Kyle Bass will actually be validated after being wrong for 10+ years (except he's probably already been stopped out of all his poorly timed trades)?
Pairs trade with FXI and EEM**Spread Trade***
An opportunity to initiate a pairs trade by buying FXI and selling EEM. Spread between both etfs grew substantially (over two sigma), spread should start narrowing make sure you execute trade using ratio of both prices.
For instance, you could go long fxi 26 units and short EEM 20 units (capital 2000usd)
Chart symbol of spread —> input the following in the symbol box: FXI - EEM
EEM. Emerging markets could drop within the last leg downCorrective structures are tricky, the wave b emerged within a complex structure.
The map posted in 2018 appeared to be valid (see related) and I dropped it early.
This is a refreshed chart of the old map.
The wave B slighlty exceeded the top of wave A.
The wave C down could emerge in 5 waves down within the strong impulse or an ending diagonal.
Price could retest the valley of wave A in the area of $18.
SPX 500 - to 4000+Hello traders and analysts,
Zone colour Master Key:
Blue = Monthly
Purple = weekly
Orange = Daily
Grey = 4hour
Pink = 1 hour
Please see our previous idea - where 3920 for the SPX has been achieved, with an explanation as to why.
The idea which lead to where we are now using Fibonacci from the latest correctional move.
The main idea for 2021:
Rolling returns - historical data .
Using the base model of 3 year rolling returns,
the simplified explanation of the model shows a 41/50 years have returned a positive growth. As opposed to 6 years of negative returns. With 2020 closing out 16.26% return .
*Note - the 6 years where the rolling return is negative - the dot com bubble only stood to lose 6.2%* Est
Why the previous Extension zones fell in line with inefficiency 1 .
Price has followed the path prediction thus far to a almost perfection at this moment in time. The reason for this is using the daily, weekly and monthly. The probability of the imbalances remain clearer.
SPX500 vs the VIX
The Vix to be maintaining below 35 max positional moves will show correctional patterns of distribution flows in the smaller timeframes where price engineering will take place to allow discounted prices to occur.
This will tend to steady the recovery but also give the rally base rally move a chance to breathe.
Vix update:
SPX vs Emerging:
What does the emerging markets show us?
Well the imbalances are within the same as the US market, but the economic recovery in terms of imbalance price driving in the EEM - shows that whilst fundamentally there is more volatility. The activeness of these markets provides a telling Fibonacci extension target is not to dissimilar along with the SPX. The commodities such as Copper, Silver, Gold and Platinum will now provide a solid buy opportunity now the demand will grow.
The second image shows the return % of the fund upon a scale against the SPX on a daily chart close.
Fundamental failures, to ensure imbalances are made clear for the bullish scenario.
The FED injecting 22% of all USD in circulation within one year.
A Staggering amount of est $9T USD was injected to save the US from collapse, despite its ever mounting debt of as it stands 11. 01 .2021
$27.775T USD
www.usdebtclock.org
The question remains as the USD loses value - in order to promote cheaper investment and more prospects for cheaper imports - the country will have a real issue with the constant cycle of financing debt upon debit.
With the Global fiscal policy to remain between 1.5-2% - this should keep the FED side lined for a few years monitoring the US and world economy.
What we would expect to see will be the growth of EM and commodity based countries in terms of FX to continue the growth against the USD.
Last comparison;
Inflation ETF vs SPX500.
If you as a trader are interested in the price ratio of Shiller P/E ratio, the market is at this moment 35.83x, with low inflation at the moment, the bulls are on the run. Watch this space.
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EEM. Emerging Market Index Fund. Correction could be over.Earlier I posted maps for EEM consolidation (see related).
This last sharp move makes me thinking of a completion of the correction.
Then we got the contracting flat WXY.
Triangle could be the next alternative ABCDE.
Target will be at 75 then.
EEM on the cusp of breakout EEM ETF is going to break out from the multi-year bear phase. The monthly chart of EEM Oct 1st, 2007 was 55.83$, the current price is very close and looks bullish for the long term with 0% interest, and the US $$ money flowing to EEM is inevitable. EEM will outperform S&P.
Emerging Markets leading the COVID reboundSince 3/23/20 when all three bottomed out, the SPX (green) has outperformed the Europe, Australia, Asia, and Far East ETF (blue, ticker symbol EFA), but both are lagging behind the Emerging Markets ETF (orange, ticker symbol EEM).
The SPX has been leading most of the way, but last month the Emerging Markets became #1.
Investors have banked on strong recovery potential in the emerging markets.