Emerging Markets: Top Forming?

Emerging Markets: Top Forming?
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By David Rogers. May 7, 2017. BLOWING ROCK, NC —

WEEKLY CHART

If we take a longer-term view of the iShares MSCI Emerging Markets Index ETF, we see divergences forming that suggest an intermediate-term “top” is near.  The bearish case is bolstered by a non-confirmation of our BRN Time Flex Study in this WEEKLY view (the indicator is not going to a new recent high to match price going to a new high).

Long-term support may have been etched out between 38 and 39, however, with horizontal resistance becoming horizontal support (dotted green line in price chart) when share prices broke up through those levels in mid-March, settled back, and now has gone to new recent highs.

 

 

DAILY CHART

The intermediate-term “soft” case is reinforced by divergences appearing in the DAILY chart, looking at price vs. On Balance Volume.  In the even shorter-term,  Friday’s big up day is a suggestion that EEM wants to go back to the highs.  BUT, even if it does, will there be enough for our BRN Time Flex Study to confirm the new price highs?

 

CONCLUSION: For the intermediate-term, we are growing cautious.  In our model portfolio we are looking to lighten our long positions, but will do nothing on the short side at this time.

This report is for information purposes only based on proprietary research performed by Blowing Rock News. Blowing Rock News  is NOT a registered investment advisor. No part of this report should be construed to be a recommendation to buy or sell securities. Such decisions should be made after consulting with your investment advisor or tax professional and consider an investor’s investment objectives, tolerance for risk, investment history, liquidity, and available resources, and tax implications, among other considerations.

About The Author

As Editor and Publisher of Blowing Rock News, David Rogers has chosen a second professional career instead of retirement. For more than 35 years, he served in the financial services industry, principally in institutional equity research. He grew up in the oilfields north of Bakersfield, California and was a high school English major and honors student. From an economically disadvantaged family background, he worked his way through college (on grounds crew and in dining hall, as well as advertising sales for college newspapers), attending Johnston College at the University of Redlands, Claremont McKenna College, and California State University, Bakersfield. Other jobs to pay for college included a Teamsters Union job in South Central Los Angeles, a roustabout in the central California oilfields, and moving sprinkler pipe and hoeing weeds in the cotton fields west of Bakersfield. Rogers' financial services industry career took him from Bakersfield to La Jolla and San Diego, then to Chicago, New York City, San Francisco, Newport Beach and Charlotte before arriving in the High Country in 2000 to take a volunteer position coaching the rugby team at Appalachian State University and write independent stock market research. He spent three years as a senior financial writer for a global financial PR firm with offices in Los Angeles, New York, Shanghai, Beijing, Tel Aviv, and Frankfort (Germany). Rogers is the author of "The 90% Solution: Higher Returns, Less Risk" (2006, John Wiley & Co., New York). He is married to wife Kim (Jenkins Realtors), and shares in the joy provided by her three grown children and five grandchildren.

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