Cycle Trading

Last Week we looked at the opportunity in the Emerging Markets. It appeared that the Emerging Markets were on the verge of forming a daily, intermediate, and yearly cycle low. EEM formed a daily swing low on Friday to signal the new daily cycle. Then EEM delivered bullish follow through on Monday.

EEM printed its lowest point on week 20, placing it in its timing band for an intermediate cycle low. EEM did form a marginal weekly swing low last week. However, this week EEM is delivering clear and convincing bullish follow through to signal that week 20 hosted the intermediate cycle low. A break of the declining trend line is needed to confirm the new intermediate cycle. And with EEM being in its timing band for a YCL, once the ICL is confirmed it will likely trigger a new yearly cycle as well.