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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.
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* 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...
* Trade Wars have escalated and now include diplomatic wars PLUS President Trump is cannibalizing prior U.S. market gains with his tariff tantrums against its world trading partners, while destabilizing a delicate world market balance

Wednesday, October 17, 2012

EEM ~ Weekly H&S and Daily H&S Patterns

Below are a Weekly chart and Daily chart of the Emerging Markets ETF (EEM).

A very large Head and Shoulders pattern has been building on the Weekly timeframe since September 2009. Price is retesting a zone in the vicinity of the right shoulder and appears poised for another attempt at a break above.


Within the right shoulder is another smaller Head and Shoulders pattern, which has been building since August 2011 on the Daily timeframe. Price is retesting the September 14th "shooting star," the high of which represents the top of the right shoulder (which is still forming) on this timeframe. Furthermore, a bullish moving average "Golden Cross" formed two days ago, and, once again, price closed just above the 50% Fibonacci retracement level today. Volumes have picked up a bit over the past couple of days.

If price breaks and holds above 43.00, the next level of resistance is the top of the Daily "head" and Weekly "right shoulder" at 44.91 (if it can make it above the 60% Fib level at 43.93).


You can see how EEM is performing compared to the BRIC countries, as shown on the 6-Month Daily charts below. If we see India and China weaken, we may see the others, including EEM, follow suit. All five bear a close watch over the next few days, as any weakening, in the near-term, may negatively affect U.S. equities.