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EEM

A sign that Emerging Markets (EEM) have bottomedThe EEM ETF is showing some signs that the worst is behind us. Firstly, the market has made a double-bottom, first fall on the 22nd June, and then the second last week on the 15th August. Double-bottoms flush out the weaker hands, who tried to pick the bottom in June. Empirically markets are more likely to rally following the second capitulation. Secondly, the price is showing a divergence from its indicators below. The indicators showing 'higher-low', while price shows 'lower-low'. The key is to trade using the indicator, and this divergence of the two is bullish. Thirdly, the ETF bottomed last Wednesday the 15th, with the day forming a Doji candle. This candle means the market opened and closed near the same price, a sign that the selling frenzy is over and the market is reversing. Doji candles often mark reversals.
AMEX:EEMLong
by MVedra
TUR on monthly equals yuckNot showing it on this chart but monthly clearly shows double top pattern that trap a lot of bull on its recovery from GFC to the end of QE, well supposedly around the time the Fed was thought to end its easy money policy. Yes it can be debated about a when where and how would be achieve by the Federal Reserve. Charts are setting up beautiful, trade headlines and geo-political risk are still up on this Country. Watch the USDTRY for clues. Shorting this should be simple except for the fact we don't know what forces are at play nor how trade policy will move forward. Keep your risk low and defined watch the 4Hr trend until that changes. Expect a test of 22 before moving lower in my opinion.
EURONEXT:TURShort
by schmidtke_jake
EWZ: Likely bottomed or bottoming here...Brazil is extremely washed out, but it has held a long term support level so far. I think odds are the market turns up from here. I'm long $PBR in particular, since it is showing tremendous relative strength vs the brazilian market, and it has a long way to go to catch up to oil, closing the gigantic spread it now has. The situation with the CEO resigning caused further headwinds in the stock, but it has now stabilized and coiling against overhead supply...over time it will break above it following the earnings report most likely -as long as the fundamental story doesn't change and debt continues to be tackled effectively...-. As for the $EWZ chart, we have hit a monthly low volume support, and also the lowest point of the last time they almost impeach Temer, this was a huge capitulation day for many investors and it is where most stocks bottomed back then. I'd look into finding interesting brazilian companies rather than buying the index directly, but it gives us a good reference point here. Another interesting chart is $EEM, and the Chinese stock market, both of which are also affected by the rally in the dollar that we had so far. Best of luck, Ivan Labrie.
AMEX:EWZLong
by IvanLabrie
6
EEM long-term wave viewWith weekly Stochastic at oversold levels and turning upwards, price at the 50% Fibonacci retracement of wave 3, price at the lower boundary (last support) of the weekly Kumo (cloud), with wave 3 already 161.8% of wave 1 (text book extension of wave 1), there are many chances that we have completed wave 4 of the entire move higher since the 2016 low. First target is at 53$ area for an equality between wave 1 and 5 since the extended wave was wave 3. Structure is very important. Price has started making higher highs and higher lows in lower time frames. Support is at 42$. Bulls need to start seeing impulsive wave structures for this scenario to get confirmation.
AMEX:EEMLong
by trading2day
1
THE WEEK AHEAD: GOOG, AMZN, TWTR, NFLX, GLD, EEM, SPYTwo biglies announce next week: AMZN, on Thursday after market close, and GOOG, tomorrow after market close. I generally don't play these via options because they are not only large notionally, but options liquidity in them is fairly poor with wide bid/asks, making fair price fills difficult and/or subject to a lot of patient price discovery, which implies that exiting where you want may be problematic. I figured I'd nevertheless mention them, since they can arguably move the markets ... . One underlying in particular draws my attention for a potential earnings announcement volatility contraction play -- TWTR. It has the kind of rank/implied volatility metrics that I look for in these kinds of setups (rank 67/implied 62). It announces on Friday before market open, so look to put on any play you're going to do before Thursday close. Most of the other underlyings announcing have implied volatilities in the 30's or below Preliminarily, the August 3rd 38.5/48.5 short strangle pictured here pays 1.94 in credit with a 69% probability of profit, break evens of 37.56/50.44, delta of -.5 (neutral), a theta of 15.25, and a 50% max take profit target of .97. Since it announces Friday, my tendency is to go out another week so that I don't have to scramble on Friday in a panic to manage any broken trade. Alternatively, the August 3rd 43.5 short straddle is paying 5.28 with break evens at 38.22/48.78, with a 25% max take profit target of 1.32. With earnings in the rear view mirror, NFLX volatility remains fairly decent here (35.5%) -- potentially enough to get one-third the width of the wings in a five wide camped out at the 20 delta in the August expiry: the August 17th 330/335/390/395 iron condor is paying 1.72 at the mid price with a buying power effect of 3.72 and break evens at 333.28 and 391.72. I say "potentially" because I'm looking at after hours quotes and the entire setup is bid 1.41/mid 1.72/ask 2.04. A September 20-delta setup -- the 320/325/410/415 -- is paying 1.80 at the mid, with more generous break evens at 323.20/411.80. On the exchange-traded fund end of things: volatility remains in Brazil (EWZ, 32.4) and petro (XOP: 28.1). Lastly -- the major food group directionals: GLD bounced off a level I said I would consider a long at last week -- 115.50, so I may look to take a small directional long there if we revisit that level. EEM bounced nearly $2 off of its 52-week low of 42.15 and would consider a bullish assumption directional shot if this strength proves transitory in the short-term. SPY is revisiting that 280 level that has been pesky overhead resistance since the beginning of the year, so I could see adding at least a split month downward put diagonal, particularly if your portfolio might be in need of some short delta here. As alternatives, I would consider pulling the trigger on an IWM short delta setup at 170-ish or the QQQ's at 180.50 for similar reasons (i.e., add short delta on strength).
NYSE:TWTR
by NaughtyPines
5
THE WEEK AHEAD: XLU, XRT, EEM, FXI DIRECTIONALS, EWZ PREMIUMWith volatility at somewhat of an ebb here, I'm eyeing exchange-traded funds for directional plays in lieu of just hand sitting. The setup pictured here is of a XLU diagonal with the long dated option out in Dec, the front month in August. I would prefer setting this up as a skip month (Aug/Oct), but an Oct expiry isn't available yet. Here are the metrics: 5.43/contract debit, max profit on setup 1.57/contract, break even at 49.43 vs. 49.54 spot, debit paid/spread width ratio 77.6%. The debit paid/spread width ratio is a little higher than I'd ordinarily like (<75% is ideal), but it's also longer-dated, so I've got extra time to reduce cost basis if I need to. I'd look to take profit at 20% of what I put it on for (1.09) rather than going for max, which assumes a finish above the short call strike. A possible variation is to buy the Dec 44 and sell the Aug 50: 5.04 db/contract, max profit on setup .96/contract, break even at 49.04, debit paid/spread width ratio 84%. The variation lowers your break even by a half strike, thus giving you a smidge more of downside pro, but also lowers your profit potential, although you can certainly roll out any in the money short call to bring in additional credit should you want to go for greater than what the max was on setup. Other candidates for this sort of setup include: XRT (within 5% of its 52 week high; downside put diagonal), EEM (upside call diagonal; at long-term support), FXI (upside call diagonal; at long-term support). The basic setup for these is to sell the front month 30-delta strike and then buy a back month long such that your break even is slightly below where it's trading (in the case of upside call diagonals; you want the break even above spot with downside put diagonals) without paying more than 75% of the width of your spread. The one exchange traded fund that still has some juice in it is EWZ, with a background implied of around 34%. Although it's a little early to cycle into August (61 days until expiry), the Aug 17th 29/37 short strangle is paying .90/contract. Given the way it's imploded, however (it's near its 52-week low), I could also see taking a bullish directional shot here, too: the Aug/Dec 28/35 upside call diagonal costs 4.88 to put on, has a max profit of 2.12 on setup, a break even of 32.88 vs. 33.04 versus spot, and a debit paid/spread width ratio of 69.7%.
AMEX:XLU
by NaughtyPines
1
Copper: Market barometer...Monthly trend signal activeCopper has once again fired an uptrend signal, similar to what happened during November 2016 and July 2017. If we track the relationship between copper and $EEM, $SPY, $PBR and $USOIL, we can see that every time copper breaks out into a trend, there is a bottom in in emerging markets and oil, and $SPY receives a boost if bullish, or, could form a turning point as well. Every time Copper has hit one of the targets or time targets, we had a correction in other markets shortly after. In this regard, it acts as a very effective barometer for growth and broad market health. I'm rotating towards EMs after having sold my hefty $SPY position yesterday at the open. I'm bullish on $EEM, $PBR, $USOIL, and others (like Argentina), the valuations are attractive and spreads vs developed markets offer a great arbitrage opportunity as well. Avid pair traders might be able to short select US equities and long EMs against, or play the spread between copper and oil that currently is an attractive proposition as well. The monthly rally in oil has at least 2-3 more months according to the signals from 'Time @ Mode' analysis that I could find, and upside to a maximum of roughly $89. Best of luck, Ivan Labrie.
FX:COPPERLong
by IvanLabrie
4