The EM black cloud has led to extreme readings on many technical and market exhaustion levels.

emerging market fundsWe are a big believer in layering in these factors when making overall investment decisions.  

Tom DeMark is a highly respected and followed "market timer" and technical analyst.  Tom has created a series of indicators that are widely followed and have had enormous success in predicting market tops, bottoms and key pivot or exhaustion points.  

My partner Diego Parma is a major practitioner of Tom's work and has offered up a chart on the EDC ETF which is a 3X levered ETF based off the EEM (MSCI EM Index, quote).

Currently, we are seeing exhaustion in many of the key EM ETFs.  This price action is all happening as we head into the first FOMC of 2014 and China PMI Friday!  

Without taking you deep into DeMark doctrine, Diego points out that the EDC is reading a "TD DAILY 13 Combo Buy".  This reading is the first one in years.  

Look at the attached chart and you can see the last 13 SELLS were perfectly called lower highs.  

If you believe that emerging markets are oversold, even for a trade, there are some heavyweights making the same call.sg2014012832892

Tagged with:

Leave a Reply