EEM / SPY - update and deductions from timwest's ideasSome time after the original chart was posted by timwest:
CCI shows a diveregence now with this pair, and, although a gut feeling - something tells me that chances are we may see a trend change in future, and EEM will outperform the US market.
Another thing to add to this is also timwest's chart (one can never praise this chartist enough on the site) - the discrepancy and distance between EEM and SPY became so large, it feels as it has to narrow down. But it is only up to "you, the reader" to decide what he feels may happen
- On one side you have US markets with a huge run over 2013 and 2014, where we've been expecting a drop that never happens
- On the other, EEM that has been going lower and recently turned up a bit. (one can note some run-ups of such countries as Korea, Thailand, India, Brazil, Turkey and even Japan sits on the verge of braking up).
So again 2 scenarios -
1) EEM breaks lower, Spy remains in tact or goes higher
2) EEM breaks up, and SPy gets its sell-off and correction.
If this idea - - holds by years end, and so far it does - then scenario 2 is quite probable. But first this pair needs to overcome the 23 resistance level.
Must quote today's comment from Tim "We are nearing the end of the end of the end of all of the positive forces holding up the market."
And my deductions agree fully with him on " I think the trade will be "out of developed markets" and into "emerging markets" for the next year"
I must include timwest's ideas that altogether will show which scenario i am leaning to and i urge you to read his comment-update on the forecast chart
PS - dear Tim. Never think that your charts are useless - i try not to post much and distract you from doing research, but if you wish i would leave notes on charts i think are good ideas (on top of the stars and thumbs up). This chart and idea is wholly made from your ideas - but added a whole deal of confidence to my feelings of the market.
