Emerging Markets - EEM - Uptrend and Bearish Sentiment

It looks like the long term downtrend is ending here:
There is a lot of consensus that the Trump Presidency will crush emerging markets by way of the destruction of trading partnerships and new trade wars. But that post-election decline has fully retraced AND with all of the fears of euphoria in the US with equity prices at all time highs and appearing extended in price and appearing extended in valuation, this Emerging Markets ETF is certainly showing a very different picture. The fears may be overblown about Emerging Markets AND there may be plenty of upside now that the sellers have sold all they can sell. Old buyers are sellers here at the 38-42 range, which it tested last year and now appears to be going for another test here in the first quarter. (January high 37.62, 37.38 last).

Tim 10:39AM EST January 31, 2017

评论:

So far, so good. When you click on the ">" to update the chart, the background should be GREEN since it is profitable so far. Not sure why the background is painting RED/Pink. Strange.

评论:

If you divide the SPY by EEM you see how poorly EEM has performed over the last 5-10 years. However, what you are starting to see now is a base form, which is a sign that the downside momentum has turned. Time will tell, but I like how it looks. I also hear how Emerging Markets have extremely low valuations now and given their poor price momentum, no one is interested just yet. It's very funny how Wall Street works. When the price is cheap and not moving up yet, everyone thinks that "it is not time to buy yet" and then once the price picks up some momentum to the upside, then buyers say "Oh, no! I can't pay up to buy it now. I'll wait until the price pulls back to where it was before where I wanted to buy it." Then there is never a pullback to let those buyers get in and it runs and runs and runs much higher. Then your job, as an investor, is to wait until those "buy the dippers" can't take it anymore and finally jump in. That is your clue to get out (at least from the short-term perspective). Enjoy the uptrend in $EEM vs $SPY. I believe that every 1-year, 3-year, 5-year, 10-year period from here will be positive for the ratio, which means I think the EEM will beat the SPY. Why? Valuation and timing.

评论:

So far, so good. $EEM is still cheap relative to $SPY and Trump hasn't done anything to destroy trading between any countries. Fears = people have already sold. Remember that. When you "hear the bears singing on the news channels" it means they have already sold and have already impacted the price.

Cheers.

Tim 12/3/2017 11:00PM EST