A Market Timing Report based on the 1-2013 Close published Sunday December 8th, 2013
The Emerging Markets have at least for now made a bottom and are moving up. Decent valuation with a higher dividend yield are there too if you compare VWO vs. the SP500 Index. I’m fully invested in the emerging markets now, actually with a 25% overexposure vs. my usual maximum exposure.
On the chart below, you can see that VWO did NOT make it through resistance the last two times it has tried, and even formed a lower high in the prior move, but I believe the 3rd time may work, because there have been two higher lows since the last major low shown. It paused at the 50 day moving average on Friday, so it could turn down from that resistance on negative news.
The risks? If growth slows more than was thought or if interest rates rise too fast, emerging markets may underperform the US markets. But if the US employment rate is improving (to 7% this past month from 7.3%), it means more people shopping for emerging market goods in the United States, which means E’s will rise for emerging markets into 2014.
Despite the risks, my money is where my mouth is. You can decide for yourself.
The VWO Close on 12-06-2013
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Look for updates on the main chart tracking pages this week as I feel they are needed and comments via Twitter.
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