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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

N.B.
* 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.
* 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...

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IMPORTANT BLOG POST UPDATES...

Tuesday, September 04, 2012

The Divergence Between the U.S. and Emerging Markets

The Weekly percentage comparison chart below shows that there has been a divergence in market movement, so far, this year between the SPX and EEM. This year, the SPX made a higher closing swing high than that made in 2011, whereas the EEM did not. Both have turned down from major resistance recently.


The Weekly chart below of EEM shows price sitting at a confluence point in between the 50 & 200 smas and the mid-Bollinger Band as of Tuesdays' close. A break and hold below the 200 sma (say, 39.00) could send price down to around 35.00. A break and hold below that level would find the EEM dropping into a low-volume zone (as depicted on the Volume Profile), through which price could drop rather quickly.


Since the SPX and EEM have trended fairly closely with each other up until this year, and since they're both up against major resistance levels, it's worth monitoring these two to see which way global sentiment lies in the short term. A global "risk-on" environment would find both trading higher, and a global "risk-off" environment would see both trending lower...if markets remain worried about global risks, but continue to support the U.S. markets, we may see the SPX trend higher (perhaps at a slow, choppy pace) while the EEM trends lower or sideways.