Emerging Markets to pick direction
The Emerging Markets ETF (EEM) is nearing the end of a pennant pattern that originated a year ago. It has consistently turned back at the falling trendline, but has also formed a shorter term uptrend since bottoming last October. It is sitting close to support now and will likely break out – one direction or the other – very soon. Even if you don’t own EEM, it’s a good risk gauge and well worth keeping an eye on.
As an interesting outlier read on the EEM chart, it’s conceivable that there is actually a massive (4 year) Head-and-Shoulders pattern nearing conclusion. I’d be surprised to see that be the case, but it seems to me like a possible read of the chart (if it breaks down from the current pennant).