Emerging markets

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Sum
SHC (Shanghai) big picture weak, but no Q2 or AprPs yet.
FXI weak and short candidate but testing AprP today, so trigger valid below that level.
EEM possible 1HP rejection would be negative, but above AprP and Q2P.
PIN not doing much this year; also above both AprP and Q2P.
RSX holding up well despite YP rejection; above 1HP and currently testing AprP, above Q2P.
EWZ similar holding gains despite YP rejection, above 1HP and well above AprP and Q2P. 

Bottom line triggers in this method are pivot changes of status. We want to be long what is above pivots and avoid or short what is below. If long EEM and 1HP rejection, then use AprP as deciding factor; also can reduce or hedge with FXI to lessen long exposure.

In some weekly strategy reports and oil I suggested taking some profits because oil hadn't cleared a quarterly pivot, but have some runner units since likely to be above the Q2P. So far that is playing out. Similar logic with any RSX / EWZ positions. 

In this set FXI still looking like best short of the bunch. RSX and EWZ are doing the best, and of course highly contingent on oil. 

* * *

SHC W chart limited bounce. For some reason for 4/1 not appearing on tradingview.com yet, so no Q2P or AprPs yet. 

FXI weak bounce too.

FXI D testing its AprP here with Q2P lower at the orange cross. Still looks like FXI can be used as a hedge if holding EEM positions, and if FXI breaks under AprP that gets you below 3/4 pivots. 

EEM W, whoa. That is just not what you want to see if long, a try and fail above the 1HP. To my view a blue bar close would look even worse than a smaller red bar. 

The AprP is just below current price, and the Q2P near the red line at 2015 close. So at least some medium term support nearby. 

PIN (India) strong buying from YS1, but no follow through. 

Dropping onto AprP here, with Q2P not far below. 

RSX YP rejection but 1HP holding now 4 weeks. Not bad.

Hard to see with current bar but right on AprP today. 

EWZ also holding a lot of gains despite 2 red bars just under YP. Also holding 1HP as support. 

EWZ well above AprP and Q2P. Huge doulbe RSI divergence on recent highs, but holding up well. 

Emerging markets

Shanghai (SHC), FXI, EEM, PIN, RSX, EWZ

Sum
China both SHC and FXI still weak and likely first choice for shorts in Q2. EEM has been doing well but paused on 1HP, interesting area to watch. PIN getting in gear but still well under long term pivots. Nifty/Sensex might be better gauges than the ETF but if you are reading this then assume USA audience and India ETFs are the easier vehicles to trade and factor in currency issue as well. RSX and EWZ have moved with oil up to YP levels; both slightly exceeded then dropped back under. Both are still showing some strength around 1HPs and will obviously move with oil.

 No immediate signal on any of these but EEM clearing 1HP would be reason to hold that if in, or consider as longer term buy although immediately running into YP makes that not the ideal setup. Red lines are 2015 close and you can see a few that jumped when getting positive on the year. 

For study note lows of year on: FXI YS1 near exact, EEM 1HS1, PIN YS1, and RSX YS1 (some 1/20 area others 2/11). Not bad eh?

SHC W chart stable along with all risk assets but weak bounce considering. 

SHC D chart that has been above MarP most of the month but stopped just under MarR2. It is likely that SHC starts next quarter below Q2P but might be above the AprP, we'll see. 

FXI W also weak bounce, although low of year on YS1 near exact!

FXI D chart well under Q1P, but soon we'll have Q2P as possible trade signal. 

EEM W chart low 1HS1 exact and rally to 1HP. Last bar red but note held last week open level. I think this is pause more than rejection so far.

EEM fading back under Q1P with RSI reaching OB about 3x. Was that it?

PIN W massive buying from YS1 but not much follow through. 

This will look better if above Q2P, we'll see.

RSX strong move along with oil from YS1 low to YP pause. Holding 1HP as support the last 2 weeks and still above despite the drop is a sign of some strength. But for now some resistance at the YP as well. 

Big jump when RSX went green on the year, and smart money taking profits on the Q1R1 exact with daily RSI showing some bearish divergence too. 

EWZ weekly bottomed before reaching any support level, due to how far down there were on last year's range. But fast move up to the YP with 1 bar just fractionally above, then back below; still holding 1HP.

EWZ D chart big jump on getting green for 2nd time. That is picture perfect RSI divergence on the recent high.

Emerging markets

Shanghai, EEM, FXI, PIN, RSX, EWZ

Sum
RSX and EWZ have had huge rallies along with oil. Buys were the clears of FebPs as mentioned in weekly strategy in mid February as USA indexes were still well below, and/or clear buying when they went green on the year. RSX clearing YP currently stronger position, and EWZ testing, with one very volatile rejection and comeback to this level.

EEM also getting into gear, and also mentioned in strategy from mid February. It just cleared a quarterly pivot yesterday. While tougher setup heading into both long term pivots and falling D200MA, already quite positive on the year well before USA indexes and thinking this theme continues. That day above the Q1P could have been some add, but not really a setup to go massively long since still heading into 2 long term resistance levels and a D200MA with RSI near overbought. 

Shanghai, FXI and PIN bringing up the rear, and nowhere close to recovering long term levels, and negative for the year. I suppose they could get moving if oil stalls and play catch up, but for now the relative weakness puts them on the short watch list. No levels nearby for any short trigger however. These are obvious avoids on the long side for now, plenty of other leaders were much better buys the last 4 weeks. 

Shanghai massive run second half 2015 above the YP and all the way to 2015 R3. Then plummet down to YP. Down like all markets early, but very limited bounce so far. 

SHC D above MarP and stable but very limited bounce compared to other markets. Still very negative on the year too. Is this accumulation or pause before another drop? No idea. If back under all pivots then it is short candidate. 

EEM W testing 1HP. The confident approach suggests clear more likely.

Q and month levels here on the daily. The best buy really when above the FebP and/or going with breakout up 3/1. First day after Q1P was yesterday but admittedly tougher setup with RSI almost fully OB and heading into falling D200 as well. Flip side is not much to risk, if back under Q1P then reduce any late add. 

All pivots together; buying above the Q1P meant just in front of 1HP. Tougher setup as they go but also consider red line where EEM went green for year. Clear support and big buying. We could continue to see this theme. 

FXI is up with low very near YS1, but not nearly close to recovering any pivot.

Still negative on the year. All above MarP however, and last 2 days above MarR2. 

PIN (India) also not doing much. Clear hold of YS1 though. 

Still negative on the year. Between pivot levels right now, although just held Q1S1 as support. 

RSX above 1HP the last 3 weeks, with look of support the last 2, and this week clearing the YP! Of course it has rallied along with oil. Now key lows on YS1 and then 1HS1. 

RSX D very strong after going positive on the year above the red line. Some shuffle near 1HP / Q1P area but only 1 day break with several holds and lifts after that. 

EWZ fast move up to 1HP / YP area. 1HP holding as support, but YP maybe resistance here. Smaller blue bar more likely to drop as next move. 

Also huge buying when positive for the year the second time. Big rejection from YP but came right back! Testing level again here with significant RSI divergence. I cannot say good buy setup here. If in from Feb or early March I think it was partial take on the YP rejection. 

China

The Shanghai Comp dropped -6% yesterday and USA stocks are shrugging this off. A few more drops like that however, could be catalyst for USA breakdown. 

This is the closest index available on TradingView, what they are calling Shanghai Class A. Note, this doesn't include yesterday's bar as the index is EOD data which kicks in USA time. So really it should be about -6.4% lower than 3038 or roughly 2845. This places it well under the 1HS1 and looks like we should see YS1 test at 2652.

Here's the daily; again picture the price near 2845. Really this had huge rejection from FepP without even tagging the level. There is an ETF for this (inverse Shanghai CHAD) but I cannot recommend a big position after -6% in the base index. But maybe 1 unit if looking to add on the short side. It is a not good entry at all but the worst downtrends can be forgiving in that regard (like buying the strongest uptrends). There also is a regular (not inverse) ETF ASHR that mirrors Shanghai and updates in real time, but due to some distribution gap we cannot use the pivots on it this year. 

I was talking about shorting FXI the last few days and so far this is moving in the right direction. I noticed that several emerging market ETFs had poked above FebPs while FXI had not. 

FXI is still trying to hold its 1HS1 but note this has already broken on a weekly close 3 bars and the last closed bar (small blue) looks weak. If this goes we could see YS1 or lower. 

And here's the daily FXI with medium term levels. Of all the other hedge / short vehicles I started mentioning last November (EEM, PIN, RSX and EWZ) it is the one that has remained below all pivots since that time. And therefore the one you could still have shorts, or if not, the first choice for a global short. 


China

Maybe I am one day late to write about China :) I mentioned China indexes / ETFs several times last fall as portfolio hedges against USA longs for the simple reason that you had a pick of several emerging market index ETFs that were below all pivots, when only IWM was in similar condition in the USA. I'll write more about these soon, but for now let's take a look at China specifically. 

There is an ETF tracking Shanghai (ASHR) but due to a distribution and price adjustment we cannot use the pivots on that this year. Tradingview.com has Shanghai Class A XGY0 which appears similar to, but not exactly the same as, the Shanghai Composite. The prices are different, but the percentage moves line up exactly, so let's say good enough. Then we'll add FXI. EEM often trades in sync with China. Lastly as the Chinese currency has been in the news and a proxy for government concern about competitiveness let's take a look at that too. 

For the sake of brevity I'm sticking with the big picture weekly charts with long term pivots only (yearly and half-year). The interesting point is that all of these are above YS1s, and EEM and CNYUSD are even above 1HS1s. This is not the case with most USA indexes right now. OK, a lot of this is due to the huge drop the China related asset classes experienced in 2015 relative to USA; as the pivots are based on the high low and close, the yearly pivots are lower on these because of the larger differential between the high and low. But that was last year's move. It will be interesting to watch some of the 2015 beat up names as 2016 progresses.  

On the Shanghai, the first thing to spot is how well the long term pivots did on the buy. You had a try in early 2013 that eventually failed for a small loss; then you didn't have to even think about anything until July 2014 when it cleared both without any question and triggered a investment buy. The market went vertical and reached YR3/ 1HR3 combo which exceeded only 2 weeks, and that was the end of the rally. Rejection of 2HP in 2015 in July was a tell; then the low of the year was on the YP exact in August. But now it is below both the YP and 1HP like everything else. Due to the big drop in 2015, it has not yet tagged its YS1. So, 1HS1 broken but above YS1 at 2953. This will be a big level to watch going forward.

More quickly now, FXI: Currently below long term pivots, breaking 1HS1 at 29.94, hasn't tagged YS1 27.77 yet. 

EEM is actually above its 1HS1 28.12. If lower, then obviously YS1 26.73 next to watch. 

Lastly the CNYUSD cross. So far it is holding the 1HS1 exact as well. I don't know if pivots will work on this like other more widely traded asset classes. Also, was the currency a topic du jour or an issue going forward? Hard to say but we can keep it simple and say above the YS1 .1508 is more stable than below.