5 replies to this topic

[Charvo]

With the low volume rally on Friday due to the belief that the Fed will not raise rates, I think EEM is in a position to fall maybe significantly from around here.  The Fed is going to try to prick the stock market bubble to make a point to Trump.  Gold is looking bearish.  Miners look the same.  Crude oil looks really bearish.  Liquidity sensitive instruments are going down for the count.  When will it affect the US markets?  I think US markets see turbulence a couple of weeks after the Fed rate hike which I believe will happen.  

 

I pay attention to XLP.  It is the consumer staples ETF.  It's been relatively strong vs all ETFs lately.  This should be considered problematic from a stock market standpoint.

 

I'm long XLP, QQQ, and short EEM via puts bought on Friday but looking to buy more on more volatility pushdown.

 

From a long term standpoint, I think the dollar is toast once Yellen is ousted in Feb. 2018.  It's going to be worse than the dollar slide with GW Bush.  Gold bottomed in April 2001 (1st year of GW Bush's term), and I wouldn't be surprised if the same happened in April.

[thoughtpwr]

What makes you think the market is thinking there won't be a rate hike?  The odds are greater than 80%, maybe they are 90% by now.  Everything says its going to happen.  Friday's rally was because the $NYMO is so oversold; the lowest it has been in 24 mo.

[thoughtpwr]

I would also be concerned with EEM having put in an island reversal on Fri.

[Charvo]

What makes you think the market is thinking there won't be a rate hike?  The odds are greater than 80%, maybe they are 90% by now.  Everything says its going to happen.  Friday's rally was because the $NYMO is so oversold; the lowest it has been in 24 mo.

I think the market rally on Friday with the 1% up day on the EEM in particular was due in part to some thinking that the Fed will not hike.  Even the treasuries bounced a little.  I think the Fed will hike, but I'm staying long the QQQ while being somewhat short EEM and looking to add on Monday and Tuesday.  

 

These weird moves in the EEM have been prevalent lately.  Gap and gos with big reversals the next day.  This is why I take profits quick in this vehicle.

[tsharp]

I was curious about the EEM, so took a look at the daily with my main set up, and do not see an imminent severe drop in play... with the indicator line still up at the ~100 level and having found support from the higher UTL, even with the negative divergence, it could still move higher.  A break of the lower dashed UTL would suggest a stronger move lower... just my two cents worth.

 

Link to EEM daily chart:  https://postimg.org/image/7ykttuy8p/

 

[Charvo]

I was curious about the EEM, so took a look at the daily with my main set up, and do not see an imminent severe drop in play... with the indicator line still up at the ~100 level and having found support from the higher UTL, even with the negative divergence, it could still move higher.  A break of the lower dashed UTL would suggest a stronger move lower... just my two cents worth.

 

Link to EEM daily chart:  https://postimg.org/image/7ykttuy8p/

 

Have you looked at EEM on a relative basis to US stocks?  EEM tanks when it starts to lag vs US stocks.  It has been doing that the past couple of weeks.  It doesn't necessarily mean US stocks will fall now though. We'll see what happens after the Fed hikes.