South Africa: fundamental issues warrent caution EZADate released on the 1st show South Africa to be contracting at a faster pace (worsening), express caution!
EEM
Shanghai Composite / S&P 500 ratio & The USDHKD PegUnsurprisingly, similar to the currency, the outperformance of the Chinese stock market vs. the S&P 500 falters when the Chinese currency can't be sustained. Not quite as direct of a relationship, but this clearly affects emerging markets, which are highly indebted to the dollar.
This is visible if you go back further as well - the broad rolling emerging market problems all occurred starting when the USDHKD peg was hit in April 2018. April 18th, 2018 was a pivotal day in that regard. Also, it's no surprise that EM currency problems are starting to suddenly become problematic once again....
S&P500 upside is limited for now We have rallied a long way since the lows, markets are not linear and the price will have to digest the move.
What will likely drive the markets higher is earning, a contrarian but realistic outcome when you consider that wage growth is outperforming inflation by almost 3%.
This, of course, would likely lead to a price rally while earnings multiples are falling!
UPDATE: S&P 500 is reacting to the ECB's TLTRO newsThe ECB made a clear statement that the economy is in the depths of despair (not really) and a new round of QE is necessary.
Todays bearish engulfing candle marks beginning of drop for SPXThe pullback has arrived, hedge/reduce exposure accordingly and wait patiently for signs the drop has run its course.
WEEKEND REVIEW: Despite +0.65% on Friday risk is down for SPX500The trend remains higher, however, its not going to be linear. Expect a pullback soon to occur for a buying opportunity around the 61.8% fib
UPDATE: Rocket Mans power move for China & SPX500 expectationMy view of the North Korea summit failure and the path forward for equities.
UPDATE: Brazil (EWZ) is now up 48%, reduce RISKLast July I put out a video suggesting that Brazil was a great opportunity to allocate capital (linked below). At the time the business cycle had turned from contraction to expansion and from a technical standpoint, we were sitting on support.
Today, +48.6% higher the risk is rising, the cycle is still relatively strong but our technicals are suggesting we reduce risk here.
USDHKD and its relationship to Emerging Markets vs. US EquitiesUSDHKD is a proxy for monetary "stuff" going on in China. China can stimulate when this peg is not being hit as most of their dollar funding seems to be running through Hong Kong. When the peg gets hit however, we see noticeable problems and effects around the world. We are now about to see the peg get re-hit once again, which will likely kick off another wave of unexpected monetary issues around the world similar to what we saw last April.
We will likely see more emerging market underperformance once again relative to US equities if this is in fact indicative of what is going on in the shadows.
USD/CLP giving some clues on EEMReturning to its bearish path, we started the week drilling the support, if it closes on this level we hope that the fall will deepen ...
Alguien pidio los $650 ? Retomando su senda bajista, partimos la semana perforando el soporte, de cerrar asi es esperar que se profundice la caidas...
#USDCLP chart
Emerging markets my d****As you can see on this chart, a gigantic rising wedge it is completing as long as price is moving towards its target.
iShares MSCI Emerging Markets ETFAMEX:EEM
Double bottom in place, confirmed looks like more upside coming all the way to 46.50
Business cycle points to weakness in EM equitiesSlowing business cycle also points to further weakness in EM equities until end of 2019 or steel prices turn higher.
SPX may be more resilient but upside should be limited.
IF EM equities will be under pressure, it is likely that DXY will be strong in the coming months.
SHORT EEM bounces. Be cautious on SPX
EEM Resuming Bull Market Started in 2016Emerging Markets (EEM) seem to be resuming the bull market that started in early 2016.
1) Recently broke out from downward channel
2) Broke out from alternative shorter term negative trend line
3) Is in the track to end the week confirming a bullish pivot, surpassing the last short term top.
Medium term objective is last major top the occurred in jan 18.
Long term objective is a major long term impulsive move with similar magnitude and duration of the jan 16 - jan 18 uptrend move.
Stop at the same level the EEM completed its pullback to the negative channel.
OPENING: EEM FEB/APRIL 36/41/41/46 DOUBLE DIAGONAL... for a 1.22/contract credit.
Doing a smidge of defined risk, all-weather, broad market instrumentation here ... .
The metrics aren't much to look at, because they aren't static,* but here they are:
Max Loss/Buying Power Effect on Setup: $378/contract
Max Profit on Setup: $122
Delta: 3.48
Theta: 1.9
As far as intratrade management is concerned: Look to roll out the short straddle aspect on decrease in value/realized gain for a credit to at-the-money. Since the short straddle aspect is worth only 1.80 here, you're probably going to want to wait until something approaching 25% max (i.e., .45) before burning a roll. As far as the long strangle aspect is concerned, my tendency is to largely leave it alone unless the short straddle has moved significantly to one side or the other, at which time I generally look at recentering the long strangle via rolling.
Look to take profit at 25% of what you'd get were this a static iron fly with risk one to make one metrics (in this case, it's a 5-wide with a risk one to make one setup paying 2.50 with a 25% max of .63 or so) and then reset the setup anew.
* -- The overall risk of the trade can potentially diminish over time on roll of the short straddle body for additional credits and/or adjustments of the long strangle aspect to maintain max loss potential (the difference between the width of the spread and total credits received).
BABA rolloverBearish on $BABA:
I believe the recent equity rally is long in the tooth and were bound to see a selloff, possibly to new lows on the S&P.
If you're bearish equities like me, BABA looks like a good short here.
Looking to see a confirmation close down to indicate a reversal of direction.
$LTC $EEMJust playing with some ideas! Found this H&S pattern on EEM (emerging markets) and got me thinking. If $BTC is the main coin of the world (main Markets) then possibly Altcoins and LTC could act as the emerging market version in coin land. I am out of $LTC currently. would want to see a bounce to 36$ ish then a slight pull back. I will enter if that pull back holds.
EEM bearish strategyThe downtrend keeps strong in the Emerging Markets, following the also bearish Chinese stock market (FXI). Any price action in the EEM between the 50 days and 100 days moving average is a good entry point to sell, minimizing the risks in the downtrend direction. Stop loss around the 200 moving average.
SPCLXIPSAHello World ! we are still breathing ...
Triple bottom at 5k ! nice number and very psychological
Regards
EEM Stuck Below MAEEM is trending in a down-up counter trend. It has failed over the last 8 months to close above its Moving-Average on a weekly basis. I am using the 16-day Moving Average (representing 3 weeks +1 of trading days), but you can play with the period and you will see similar results.
EEM is currently testing close to its 16-day Moving Average and near the top of its channel resistance line. This is telling me that there is a strong possibility for the price to drop further down over the next week or two.
I think taking a sell-limit at $39.00 with a buy-stop at $40.61 (its 16-day Moving Average), and a take-profit at $37.58 (a previous resistance level tested) is the way to play this trend trade.
Short FXI (Money flow to China? Oh that's stupid)Short FXI once the rising bearish wedge breaks. TP 34, ideally 32
