EEM Watch

The iShares Trust MSCI Emerging Markets Indx (EEM), which tracks countries on the growth fast-track, is showing bull phase on the macd, emerging from bearishness for the first time since April 16.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
EEM $38.09

At 2:30 p.m. Eastern

When I hear the phrase "emerging markets", I think of markets that are -- well, emerging. But that's not the case with EEM, which more properly should be called "emerged markets that have yet to develop arteriosclerosis".

EEM's largest holdings are in these countries: China, Brazil, South Korea, Taiwan, South Africa, India, Russia, Mexico, Israel and Indonesia.

With such a diverse group, who knows why this exchange-traded fund moves? It just does, and the best I can hope for is to jump on for a short ride, like on a San Francisco cable car.

On the bull side, the macd phase is confirmed by Person's Proprietary Signal, which moved into bull phase on Thursday. Also, the average directional index is at 32, suggesting that the signal will be followed through by actual price movement.

On the bear side, the parabolic sar has not yet aligned with the pps, and the price has set lower highs and lows for two days running. Also, the more sensistive signals, such as the psar and pps, have been giving a lot of reversal signals over the past couple of months.

So any bull trade on the etf, in my book, would need to be short term and watched like a hawk for a quick exit if the signals so dictate.

Reversal Levels

• $40.93, +7.5%
• $38.81, +1.9%
• $38.09 <== You are here.
• $35.21, -7.6%

In the longer term, EEM has been on the decline since hitting $55.83 in October 2007. It bottomed below $20 in the autumn of 2008, retraced back to nearly $45, and since then has declined sharply.

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Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.