There has been a lot of hype over the last 6 months about the run up in Emerging Markets, to which I say ‘meh’. Yes the Emerging Market ETF, (ARCA:EEM), has risen 20% but look at the bigger picture. The chart below shows that the price has been moving in a range between 35 and 45 for 3 years. A good move up in a channel, yes. On fire, no.
All that may be about to change though. Here is how the pieces stack up. First that Elliott Wave stuff we talked about yesterday in the NASDAQ Composite is working here too. The peak of Wave 1 pulled back almost entirely to 2 and now the subwaves in wave 3 would look to take the price a lot higher. like over 100. But that may be getting ahead of ourselves. A little bit of a shorter timeframe sees a Deep Crab harmonic that does not look to reverse until about 80. Still a long way off. In the shorter time frame the price is peeking above the channel this month. The Bollinger bands are opening higher, the RSI is break above its range and the MACD is heading up as it makes a higher high. A monthly close over the channel may be the signal for you to load up the boat on Emerging Markets.
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