Emerging Markets Falling Hared
September 30. 2014
We went SHORT Emerging Markets on September 10, 2014. As of today we are up 13.33% on the trade.
With yesterday’s 2% drop in EEM the etf is approaching a strong area of support at around $40.50 that was established in April 2014.
If it does not hold at $40.50, the next support level is down at around the $39.50 level (a price cluster that formed in February/March 2014.
We really have no idea why Emerging Markets are falling. But we see that the momentum is to the downside and we are, for the moment, on the right side of the trade.
The $40.50 support level should slow down the downward momentum. We could see EEM bounce around this price zone for a few days. A daily close below $40.50 could quickly propel EEM down to the $39.50 level.
We watch and wait.