Caution for India

Indian indexes and ETFs have been on fire for most of 2017 but last week showed some comparative weakness that we haven't seen in quite some time.

Active Pivotal Momentum traders already know this, with INDA the only one of 8 global indexes & ETFs that I track to be under its SepP. 

There was also bearish action - meaning clear rejections - from long term resistance on two key indexes and the ETF.

Longer term investors might give this a week and see what happens at the new Q4P in October but given everything we are seeing - YR2 rejections after high tests, RSI divergence, break of SepP, all happening as 7 other global indexes/ETFs are above all pivots - I'd err on the side of caution. 

NIFTY W
Double top with BB divergence and glaring RSI divergence.

23 61 NIFTY W.png

NIFTY W
2nd rejection of YR2 / 2HR1 combo looks definitive, especially with the RSI divergence.

23 62 NIFTY W.png

INDA W
This move is being echoed in the INDA ETF despite the currency headwind of falling $USD.

INDA D
Several larger selling bars with weaker up bars before the breakdown; regardless, below D50 and below SepP.

 

23 64 INDA D.png

Global stocks

Global stocks have been great sources of trading and investment opportunities. In 2015 while USA indexes were sideways China had a terrific rally and then huge collapse. These moves were trade-able on ETFs (thin volume but there). EEM had a huge drop in the 2nd half of 2015, and Brazil has led most of 2016 in percentage return among country / index / sector ETFs.

There are a lot of possibilities but first let's divide between developed and emerging. Developed often means Europe with a focus on Germany and then Japan; with key benchmark indexes of DAX and NKY. If you are an American retail investor, then the choice is EWG & EWJ versus hedged versions. I tend to not mention these so much even though I have at other times had a significant focus on Japan - the main reason is these tend to be correlated with USA indexes and moves are more a matter of magnitude than direction and timing. Mostly, correlated not always. Regardless, if you are playing anything outside the USA, it is best to emphasize pivots and technicals on what you actually own versus an index. 

I'm sure there are people out there who want to include all the available country ETFs and this could be a worthwhile exercise, but I think quite a lot moves together anyway and I'd rather stick to the main vehicles. 

Moving onto emerging markets the big ones I track are:

FXI - China via Hong Kong
EEM - popular emerging index
INDA - India
RSX - Russia
EWZ - Brazil
ACWI - Global benchmark, kind of like NYA functions for USA indexes
Shanghai Comp via XGY0 on trading view, close enough, and tradeable through ETFs

We could also get into China tech cos and corresponding ETFs because they are significant in market cap but let's save that for another day. 

The main point is if we are positioning and selecting 1-2 USA mains, 1-2 USA sectors, 1-2 global indexes, 1-2 currency commodity positions, then a selected 0-3 as shorts then we are at about 10 different vehicles maximum. I'm sure most people have more but to me this right for an active trading account. 

For each global vehicle - weekly technical chart, weekly long term pivot chart, and daily pivot chart. 

FXI
Monthly chart at several MAs clustered, so an interesting area to watch: 20MA 37.52, 50MA 37.92, 100MA 37.85.

FXI W
Long term pivots show short cover / speculative buy chance on the February lows, then partial long term buy in 2nd half above the 2HP. 

FXI D
Monety was made in July and August; chasing in September, the 3rd month above the monthly pivot, got you in at highs. Since the election it sold off but now come back to about even. 

EEM M
Despite the percentage strength of most of 2016, thi sis under falling MAs on the monthly chart (all falling slope except 10MA). 20MA currently 35.40 interesting to watch as we head into the monthly close. 

EEM W
Responding very well to pivots with 2014 high, 2015 high, and the 2015 and 2016 lows all on long term levels or near enough. 2HP in 2016 has acted as support and EEM was able to clear the YP and then hold. Post election break but coming back - key level to watch here at 35.45.

EEM D
And there is the YP on the daily chart with a falling 20MA right on top. That said, rising D200 has basically held after trading only 3 days below. No signal long or short here, interesting level to watch. If anything I'd try shorting against the YP since the 20MA and 400MA are both falling, but with risk health and safe havens weak I would not be surprised at attempt to clear. 

INDA M
Modi's cash exchange not working so well, but maybe this is a buy chance. 

INDA W
Getting out of the way of YP rejection saved some pain here. Back above 2HP would be a positive though. 

INDA D
Even if 2HP clears, most daily moving averages against a rally except recently stabilizing 10MA. 

RSX M
Crashed with oil and has had decent rally enough off lows, but not too zippy in the second half. 

RSX W
Attempting to stay above YR1. 

RSX D
Issue with shorting the YR1 is still above all pivots and all rising MAs. Considering other global indexes, RSX could be long 11/15 and now seeing what happens. 

EWZ M
Incredible percentage rally but stopped running into falling 50MA (also weekly 200MA). 

EWZ W
First sign of strength in early 2016 was a bottom above long term support, where everything else was testing or breaking YS1s. Currently trying to stay above YR1 after breaking 2HR1. 

EWZ D
Note bar of election under NovP where it has been above, and below 2 MAs. 

Shanghai Comp
Quietly holding M50MA along with M100, back above M10 and testing M20 at 3470.
 

SC W
Partial buy possible from 10/10 week above 2HP for the 2nd time. 

SC D
Pivots and MAs agreed in August that failed, but next time has been a very nice trending move. But with RSI mostly overbought from 11/11, no new entries up here.