Welcome and thank you for visiting!

The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...please read my full Disclaimer at this link.


* If the dots don't connect, gather more dots until they do...or, just follow the $$$...





* Wed. March 6 @ 2:00 pm ET - Beige Book Report
* Fri. March 8 @ 8:30 am ET - Employment Data
* Wed. March 20 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. April 10 @ 2:00 pm ET - FOMC Meeting Minutes

*** CLICK HERE for link to Economic Calendars for all upcoming events.

Monday, January 23, 2012

High Dividend-Paying Stocks ETF vs Emerging Markets ETF

Below are two 3-year Daily charts. The first chart is of an ETF containing high dividend-paying stocks, DVY, and the second is of the Emerging Markets ETF, EEM. Inasmuch as the Major Indices are near major resistance levels, as mentioned in my post of January 20th, I thought I'd compare these two ETFs to see where money flows over the next days/weeks. I'll say that DVY represents value stocks and that EEM represents the more risky, volatile growth stocks.

DVY made a 3-year high on January 3rd of this year and is currently holding above last month's Volume Profile POC (horizontal red line) at 52.81. It has been in a daily uptrend since its December lows. If traders are interested in purchasing additional value stocks, I'd expect to see DVY break and hold above its high of 54.63.

In contrast, EEM made a 3-year high on July 2, 2011 and has retraced almost 50% from its October lows. It is currently holding above last November's Volume Profile POC, after a lower POC was made in December. It has also been in uptrend since its December lows. It's approaching resistance around 42.90. We can see that it is forming two interesting patterns...the first, a larger Head & Shoulders pattern with a neckline around 38.50 (pink horizontal line), and the second, a smaller Inverted Head & Shoulders pattern with a neckline around 42.90 (blue horizontal line), which also happens to be the right shoulder of the larger H&S pattern. If traders are interested in purchasing additional (higher risk and more volatile) growth stocks, I'd expect to see EEM break and hold above the IHS neckline of 42.90, and the yellow downtrend line just above.

The two graphs below shows a comparison of percentages gained and lost so far during two time periods on DVY and EEM, as well as on the Major Indices.

The first graph begins at the May 2, 2011 high of EEM until today's close. The second graph represents price action from January 3, 2012 to today's close. The first graph shows an overall gain in percentage from the May 2nd high for DVY, with EEM still in negative territory. The second graph shows a greatly reduced gain in percentage for 2012 for DVY, with EEM gaining the most.

In conclusion, using the reference points as noted above on the Daily charts in combination with these graphs, we can track to see whether money flows into or out of these value vs higher-risk, volatile growth ETFs over the next days/weeks.