Emerging

Sum
Only 2 of these 8 above all pivots, ACWI and KWEB. 

Below all pivots: SHComp, EWZ.

Below Q2Ps: FXI, EEM, INDA, RSX.

ACWI
Institutional index - above all pivots. So many holds of pivot & D200MA combo.

2 42 ACWI.png

SHComp
New low of year 5/30. Trying to hold YS1 but below all pivots again. 

2 43 SHC.png

FXI
2 breaks of D200MA and 2 recoveries; below QP but above JunP. 

2 45 EEM D.png

EEM
Weaker throughout Q2.

2 45 EEM D.png

KWEB
Joining in tech strength, back above all pivots. 

2 46 KWEB.png

INDA
Bouncing after new low of year 5/23. Sensex doesn't look nearly this bad though. 

2 47 INDA.png

RSX
Great if you spotted HR1 rejection, AprP rejection and QP rejection all on one day. Otherwise not much going on.

2 48 RSX D.png

EWZ
Sad story for Brazil, one of the early leaders of 2018 to be crushed. Signs of trouble early in Q2 with 2 3 clear rejections of Q2 area with HR just above. 

2 49 EWZ D.png

Global stocks

If I had more time I would include these in the weekly rotation. These have been great trading vehicles both on the long and short side with a lot more movement than most USA stock indexes for quite some time. 

As soon as we go outside USA we have a currency issue. This is at times not insignificant. Consider Japanese Nikkei move from June 2012 to 2015 highs was 154% trough to peak, while EWJ owning the same stocks (though likely not as broad) was 54%. A deep pockets hedge fund with a global desk could trade futures on various exchanges, but I will keep this to ETFs that are more commonly available for the typical reader. 

EEM is quite commonly mentioned emerging markets ETF with high volume.

FXI China, mostly Hong Kong shares. (There are ways to play Shanghai and Shenzen - these were great in 2014-15, but stuck in range this year.)

India has choices of a few ETFs; all have currency issue (compare Nifty to any of the ETFs), but will usually mention INDA or PIN. PIN has been a bit better, so let's keep to that. 

RSX also a lot of volatility that has moved somewhat with oil.

EWZ Brazil led the drop last year and this year has been the best thing to own. Funny. 

ACWI is global benchmark ETF that tracks the MSCI All Country World Index. This corresponds to NYA/VTI for global stock market activity. 

Sum
As 4 of 5 USA mains are below Q4Ps, EEM has tested its Q4P once and held, FXI 2nd test on Friday but still above, PIN also 2 tests and holds, RSX 2 Q4P breaks the weaker of the bunch (in addition to high on YR1), EWZ soaring and great if you are holding but buy now just late. ACWI as a benchmark (to compare global stocks vs USA via NYA/VTI) also testing Q4P but mostly above this quarter places it relatively stronger than USA. 

A full chart workup on all of these is definitely worthwhile project but for this post will keep to 1 weekly tech analysis chart, 1 weekly pivots chart, and a daily pivots only chart for trend. 

EEM
This was hammered 2015 second half, but has outperformed in % terms on the rally this year. Rising W20MA (orange) support, along with W100 (thin black). If above the W200 (thick black) and top of BB obvious resistance. 
EEM weekly pivots chart cannot really get going above 2HR1 level despite trying a couple times.
EEM daily pivots only (no support / resistance) with MAs shows all above Q4P. Compare that to USA indexes (4 of 5 below Q4Ps right now). I'm thinking a re-test of Q4P with nice rising 100MA would be ideal buy (if out of longs). Of course if market rebounds it could easily recover status of above all pivots. Remember there is likely to be performance chasing into year end and everyone will be eager to own the 2016 winners. 

FXI
This weekly chart was an additional reason I thought that EEM & FXI would cool off in Q4. 10/1 Total market view: "China has had an impressive summer, with FXI all above monthly pivots for 3 months in a row and a 22% rally off 6/27 low to 9/8 high; this has helped EEM as well. But some cooling off would be normal." I was looking at the weekly 100, 200 and 400 all likely to be resistance. But now FXI has dropped into a rising weekly 20MA. Again compare this to USA indexes, as 4 of 5 mains are below weekly 20MAs and some of them even sloping down. 
FXI is under its YP because the 2015 range was so wide. Above 2HP was enough of a trend change to again consider that as longer term buy. Better if holds that 2HR1 as support. 
2nd test of Q4P with rising 100MA just below. 

PIN
Also dropping onto rising W20MA. Though this has done nothing since August, most USA indexes haven't done anything either. Check out that consistent buying near the YP on the daily chart from late July everything down there immediately back up. 2 holds of Q4P so far and anything higher on Monday would be back above all pivots. 

RSX
RSX has struggled up near its upper weekly BB despite oil's recent pop. It is also above its W20. And there it is, the low of year on YS1 and high of year on YR1 acting as resistance since mid August. RSX had multiple holds of the YP from April all the way to June before putting in another 18% up from that level. 2nd break of Q4P here, though slight.

EWZ
Last but not least! I first mentioned this along with RSX back in February because I saw it was above its monthly pivot when USA were below. That was odd at the time because this was one of the worst performing assets in 2015 and had been one of the best shorts. If you force yourself to buy what is above all pivots and hold, then you wind up with things like this sometimes. Note that aside from 2 day drop in March right on top of sharply rising 20MA, this has had some kind of long term strength (above HP or YP) since 3/4. Potential buys:

2/3 above monthly pivot and rising 10MA, stopped out
2/12 deceptive but above monthly pivot and slightly rising 20MA, could be holding
3/3 above Q1P, could be holding still
4/8 above all pivots and rising MAs, doing fine
5/10 probably stopped, if you bought there
6/3 brief drop below YP, recovered above all pivots; could be holding still
6/16 also nice looking bar
6/27 Brazil not really caring above Brexit eh? Higher low than 6/16 which learly held YP and above all pivots.
7/6 test of Q3P / OctP combo really hold or add at that point
8/2 massive hold of AugP and 2 rising MAs
9/21 doing OK fractional break of SepP otherwise fine
10/3-4 above all pivots with nice rising MAs, when much of USA was below

But I'd say given weekly chart falling 200MA, weekly and daily chart RSIs, % move off lows, certainly it is getting late in game to be now thinking to try a long. Even though leaders often benefit into year end, with charts very overbought the risk shifts to traders taking profits. 
 

ACWI
Sitting on W100 the last 3 weeks, with W20 nearby. 2nd time near Q4P, interesting to see if holds. 

 

 

 

 

 

Global indexes

Sum
China and Japan are leading down. NKY, Shanghai Comp and FXI already below all pivots. Any lower and EEM also will join them, and PIN (India) not far off. Last year's real dogs EWZ and RSX are doing much better in comparison, both above YPs, due to strength in oil. 

* * *

Typically I won't have time for this, but I thought it would be interesting to look outside the USA indexes for more context. First let's start with key developed market indexes, DAX and NKY.

DAX is below all pivots except the Q2P. It has been under its long term levels all year. 

NKY also has been under long term levels all year, and again below all pivots. This makes NKY among the first choice for shorts, for those who can trade this index directly (ie EWJ, which is still above MayP and Q2P). 

Shanghai Comp while so much in the media is down near lows, and again below all pivots since 5/6. 

FXI is also under all pivots. 

EEM high of year is on the YP near exact. Oh and the low close was on the 1HS1. Yup, pivots on the big turns! Testing Q2P; if that breaks, below all pivots. 

PIN (India ETF) below long term levels all year, and failed near testing 1HP. Looks like another test of Q2P on the way, if that goes then below all pivots. 

RSX Russia above its YP due to strength in oil, but now 2nd time below MayP. We'll see what happens. 

Similarly EWZ Brazil above its YP, but another break of MayP makes near term move less clear. 

Emerging markets

Check the tag for previous versions.

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. 

Emerging markets

EEM, FXI, PIN, RSX, EWZ

Sum
EEM, and especially RSX and EWZ are leading in pivot terms. Funny to think but EWZ beat all the USA main indexes to reclaim its Q1P! RSX too for that matter but less gain since clearing that level.

And now like USA indexes these 3 emerging market indexes are testing or approaching long term pivots and will be interesting to watch. Especially if the dollar continues weaker, these could continue to surprise the market. I first noted this in mid February when all USA indexes were at FebS1s and these three, EEM, RSX and EWZ beat these beat USA indexes back above FebPs by several days. 

FXI and PIN are the laggers and while both bottomed on major support, are not close to recovering their QP, HP or YPs. 

EEM W chart from 2015 YR1 down to pivot, break and then plunge, this year's low bang on 1HS1. Note picture perfect weekly RSI divergence on the 2016 low. May test 1HP orange dots soon. 

Here's EEM daily chart with medium term levels only, all above MarP and even above MarR2 here. Heading into Q1P soon. 

FXI low smack on YS1 but not as much pop as EEM, and far under its 1HP.

Above MarR1 but all below MarR2. 

PIN India also low right on YS1 but not in range of recovering long term pivots yet. 

This looks even somewhat like FXI but PIN low on Q1S2 while FXI was below that. 

RSX massive rally along with oil from low on YS1, and poking above 1HP here and within range of testing YP level. Also perfect RSI divergence compared to 2014 and early 2015 lows. 

RSX D above Q1P! If you bought when suggested mid February and held, or cut and got back in, now the Q1P can be easy hold level along with the 1HP.

EWZ was one of the best shorts last year, but this year bottomed without reaching a long term support level. I cannot think of any other stock index / ETF that did that. Now back to YP! 

EWZ jumped above Q1P on very high volume and has decently gained since then despite being overbought. Quite healthy here. 

Emerging markets

I first mentioned the emerging market ETFs of FXI, EEM, PIN, RSX and EWZ on 11/9/2015 as hedge choices against USA longs that were breaking under Q4R1 resistance. OK, these had been down a lot already so not a completely radical idea, but using pivots it was an easy spot as the collection were weaker and below more pivots compared to the USA indexes which at the time, were significantly stronger.  

As of 11/9/2015
SPY, QQQ and DIA above all pivots; IWM above 3 but below 2HP; NYA above medium term Q4P and NovP but still below YP and 2HP.

FXI below YP, 2HP, just above Q4P and NovP; as of 11/23/2015 was below all pivots and has maintained that category since! From 11/23 to the low on 2/11, FXI dropped 26% and is still down about -20% today. 

EEM below YP, 2HP and NovP; as of 11/27/2015 below all pivots, and maintained that status until 2/1. 2/3 lifted above the FebP again, then 2/16 was the 3rd time above the level. 11/27 close to low -18% and as of 2/16 close still nearly -12% down.

PIN as of 11/9 already below all pivots. It briefly recovered the DecP the last few days of the year, and didn't break under until 1/6. 1/6 gave a host of choices but measuring from there matching other indexes with at -12% drop and currently down about -9%, still below all pivots.

RSX as of 11/9 below YP and 2HP, above Q4P and NovP. Returned to below all pivots on 12/7 and stayed that way until 2/3; the last 2 days the 2nd time above the monthly level. 12/7H to low -25% and until 2/16 close still nearly -13% down. 

EWZ was a fantastic short for much of 2015. As of 11/9 it was still holding on to NovP; after a few bounces returned to status below all pivots on 12/10. From there to low was -25% down, and as of 2/3 it reclaimed the FebP for the second time for a drop of about -14%. 

If you were looking for a YS1 to cover, this nearly reached on FXI at the low, PIN near lows, RSX near exact lows, but you only got to 2HS1 on EEM and no long term level on EWZ, only Q1S2. 

Now what? As I type situation different with only DIA poking above Feb today, while EEM cleared yesterday fractionally, and RSX and EWZ have been above for 2-3 days as well. I suggested EEM as a speculative buy yesterday at the close, and also mentioned RSX and EWZ as long ideas in the weekly strategy sum here.  

While all stock indexes have a lot more to go to regains quarterly levels, for now the recovery of Feb pivots is definitely a bullish step, and it will be interesting to watch these going forward.

Main point: if you used these for great shorts last year, you had chance for fantastic gains. But now as long as we are seeing emerging markets beat USA indexes to clear Feb pivots, we can think the other way. Of course, this only applies to those above pivots, and anything that stays below all pivots while others recover remains a first choice short candidate.