Emerging Markets are the Place….to Avoid

• Posted by Greg Harmon
• on September 26th, 2013

A look at the weekly chart for the Emerging Market ETF, $EEM, shows that it has done nothing interesting for nearly 4 years. Bouncing along between 36 and 45.50 with a brief attempt to move higher. So why does this attract the attention of so many strategists? Long consolidation can lead to a major move once it does break out. And look at the short term daily chart. With moves like the one off of the bottom at 37.17 in August up to 43.32 or over 16% in just 3 weeks why not play

the channel in the meantime. The current bearish Bat Harmonic playing out targets a pullback to 41.17 and if that fails 39.26. A reversal to the top of the channel at that point would not be anything to shake a stick at. With the potential of a break of that channel eventually. If you wanted to be a analyst superstar, betting on emerging markets at the bottom of this channel was a surefire way to win over the last 4 years. Will it continue? Yes Emerging Markets are a place to avoid for now, until they settle and turn. But they are worth a watch and a trade from that point.

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