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).


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