2use
Long

EEM / SPY - update and deductions from timwest's ideas

216 10 5
Some 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 -
FORECAST FOR 2014 FOR DJIA (DIA)
- 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.

Tim's quote about the end of positive forces holding up the market could prove to be very true in the next couple of months. Very nice analysis!
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ttraider minorplanet2
2 years ago
Where can I find the quote? Thanks
Reply
2use ttraider
2 years ago
In his comment to his own chart here
FORECAST FOR 2014 FOR DJIA (DIA)


Ill quote it here in the chart details as well for you :)
Reply
2use
2 years ago
UPDATE (as it does not fit in the description): timwest's 2014-10-06 Full Comment on the 2014 Forecast chart:

"It's about time to update this as we face the final three months of 2014. Earnings have been levered through stock repurchases and stock prices have been leveraged by margin accounts across the country. The entire balance sheet of the financial system has been leveraged through the Central Banks around the world. We are nearing the end of the end of the end of all of the positive forces holding up the market. The hard part to figure out at this moment is where all the money will go that is resting in stocks and bonds.

The final flush down in gold is happening with gold under $1200 as the ultimate "fight against money printing" seems to be falling on its face. The believers that Gold would save their portfolios are being truly challenged because as we all know, burying your head in the sand (which gold investing can be likened to) is not an investing strategy. Commodity prices are tumbling across the board with ample supplies of corn, wheat, soybeans together with crude oil, heating oil, and even natural gas, are keeping inflation at bay. Even though employment is gaining, apparently it is only in people aged 55 and up that have found work since the recession started and magically, their wages have not risen.

So, we still face a demographic headwind of people retiring who don't spend as much as they used to and will continue to spend less each year, keeping a cap on the US economy. There simply aren't enough new spenders to keep the game of musical chairs going. We simply won't keep trading up from the condo to a small single family house, to a much larger single family house, to the mcmansion. That game is over. The economy won't be sustained on massive spending on houses anymore, we all know this. The economy will grow on getting more transactions taxed that have heretofore been untaxed. Enough waxing on.

I am thinking that year end could be lower than I forecast, but at this point let's just take one day at a time. So far, so good for this year. I don't know what will trigger investors to start to sell stocks and I don't know what they will buy. Cash is still a wasting asset, note the negative interest rates in various places. We all just need to realize that deflation is still the bigger risk and emerging markets may be the beneficiary as they are growing. So, I think the trade will be "out of developed markets" and into "emerging markets" for the next year (as a whole - details to follow)..."
+1 Reply
timwest PRO
2 years ago
Thanks 2use - I believe in the power of team. Thanks for the comments and add-on work and insights. You have a good spirit. It's good to read your comments.
+2 Reply
2use
2 years ago
Price went lower the previous low. Should it turn up, and make a bottom - this will create a positive divergence on the technicals and add to the long trade. So far SPY ran so fast it made the pair price dip as EEM and the rest of the world did not catch up to the 10% jump yet.
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timwest PRO 2use
2 years ago
Yes - The call to "diversify into EEM" is a rocky start.
+1 Reply
2use timwest
2 years ago
US markets make my brows go higher, this was quite an unexpected run - best 2 weeks of the year so far. Almost without a hitch passing through all the possible short-term resistances. This was such a fast -10/+10% that it seems artificial.
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timwest PRO 2use
2 years ago
Agree. The short selling in VXX is nothing short of manipulation. There are some tails that can wag the dog out there and it might just be the options markets these days. I hope we can keep monitoring the action and find safe spots to keep taking trades. Many ideas where I am selling against resistance are not working, but some are. I hate when I get into "conspiracy mode", so let's just focus and find good trades.
+1 Reply
2use timwest
2 years ago
With you on that one, i know im not the only one seeing a lot of experienced people expecting at least consolidation on some levels. Looking at 4/1 hour charts there are a lot of gaps for instance, and stocks cant run forever. Once they stop, i wonder if they are to cover the gaps (i seem to note this happen more and more with my short experience). Ps - GoPro and Tsla got hit and rebounded today. I wonder if it is time to update ideas ;) ?
+1 Reply
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