Emerging Markets (EEM) Breakout Bullish Into Year-End

Mark Newton

Not too much meaningful price action in either direction into and/or post FOMC yesterday.

Yet, US treasury yields fell sharply, as did the US Dollar. Much of this is due to investors thoughts of a “dovish” decision.

Emerging markets breakout: $EEM spiked higher along with Commodities, and this is really the most important technical development. See chart and analysis further belows.

Investor confidence is rising in the hopes of some kind of Trade Deal being passed – this might keep the rally afloat a bit longer. 

Stocks like Apple (AAPL) remain positive technically and charts still show a good chance of this pushing up a bit higher. Given that this stock is heavily weighted among many indices and ETF’s, it’s right to give this a fair amount of scrutiny.

Overall, the lack of any weakness post FOMC and strength after lends itself to the thought that an upcoming test of 3149-51 is on the way.

A move over 3151 would be far more positive in thinking a larger rally is underway. A move under 3116, of course, would turn trends more negative.

$EEM Chart: Additional Emerging Markets gains are likely

emerging markets eem trading higher december 12 stock market rally bullish chart image

The Emerging Markets (EEM) have turned up sharply in recent days, given the acceleration down in the US Dollar. Additional gains likely for Emerging market and EEM in particular and one should overweight EEM for a push back higher to 45-46 with stops under 42. China likely to start showing better participation, and this area also deserves mention.

S&P 500 Index Trading Outlook (3-5 Days): Bullish 

Leaning bullish given positive price structure out of key stocks like AAPL which likely moves to 289, and no real evidence of weakness post FOMC. The Bottom Line, BULLISH OVER 3116, and bearish under (S&P Futures). Climbing above 3151 would be very constructive.

If you have an interest in seeing timely intra-day market updates on my private twitter feed, please follow @NewtonAdvisors.  Also, feel free to send me an email at info@newtonadvisor.com regarding how my Technical work can add alpha to your portfolio management process.

Twitter:  @MarkNewtonCMT

Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

NOT INVESTMENT ADVICE – PLEASE READ INVESTMENT DISCLAIMER.