Until proven otherwise Shares MSCI Emerging Markets ETF (EEM, quote) continues to trade within the $3 channel that is largely formed between $38.00 and $41.00.

Emerging-marketsWhile we are encouraged how emerging markets have traded vs SPX as the U.S. Dollar (UUP, quote) has rebounded, we felt US earnings season would provide a better catalyst to emerging market equities outperforming off the FX headwinds the U.S. Dollar is creating for many.

For now the spread of EM to DM (EEM v SPY) see 20.59 as the primary trading objective into mid-April.

Note we are in a seasonal pattern for emerging markets where we have seen greatest returns in 1Q through April before we have confronted typically nasty volatility and drawdowns that come in May and June. Stay tuned.

Chart_ EEM 

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