Tuesday, April 8, 2014

EEM has to stop doing something right now or else it'll start doing something else

Here's EEM weekly:

After about $42.50 people are going to start to say it's bust through a long-term downward trendline. After about $43 it will even be printing higher highs.

That'll basically mean that it no longer (necessarily) sucks to buy EMs.

Volume is increasing and impressive on this weekly chart, but RSI(14) is over 70 on the daily. So whatever thing of significance the EMs are going to do, it looks like they're going to do it soon.

Things are complicated by the individual countries:

Brazil is 11% of EEM, and it's been taking off like crazy for a month now for some crazy reason. Looks grossly overheated though, but it could stay that way. Anyone out there who can tell me why people are buying Brazil again? This a World Cup thing or something?

China is 18% of EEM, and it's broken above its SMA(50) on news that it's not actually collapsing right now KTHXBYE.

India is only 6.5% of EEM, so it doesn't really matter to EEM whether the Nifty 50 is getting grossly overbought on unrealistic expectations of the speed at which a possible Modi government could enact reforms and repair the Indian economy.

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