Wednesday, May 25, 2016

The Emerging Emerging's And (Possibly) The Most Hated Rally In History?

Earlier this past weekend I dropped China ETF (FXI) as a strong long/buy as a very nice bullish declining wedge was going in. Sure enough this week a strong breakout has occurred.  There's a gap that needs to be filled at $33.00 which I expect it to given it's strength so far, but now FXI finds itself in a declining channel with higher low in place. Can it break the upper resistance line at $34.00?
Emerging Markets ETF EEM is in a disimilar pattern to FXI over the same period (an expanding megaphone), but like FXI it also has some very strong overhead resistance at $35.50 while making a nice bullish declining wedge just beneath the resistance line. Could this turn into an ascending triangle that breaks out above $35.00? Could this summer have one of the most hated rallies in history? Please read this excellent article at EnergyandGold.com