A Market Timing Report based on the 1-24-2014 Close published Sunday January 26th, 2014
Let’s start with Europe (VGK), which fell to around the 50 day moving average. We are told things have been improving both in terms of credit and the economy in Europe, and if that is in fact true, we’d expect reasonable support to hold in this pullback and the rally to continue. If the 50 day moving average area does not hold, look for a fall to the first red line below (chart just below). You’ll note that the last test at about the 50 day moving average did hold, although the last test was a bit deeper.
The VGK European ETF Chart:
The Pacific Rim (VPL) has suffered significant new damage over the two day period ending this Friday. The Japanese yen has been rallying which hurts the biggest component of the Pacific Rim index. The market topped out in mid-November and has since attempted a rally from the top HORIZONTAL aqua line (chart below), but it failed over the past two days. Note the rally back to the curved aqua line representing the 50 day moving average on 1-02-2014, followed by the failure.
The Pacific Rim ETF Chart (VPL)
What about the Emerging Markets? We lightened up again on the emerging markets a while back when the rally weakened. You can see in the chart below that the index ETF looks like it’s dropping to one of the two red lines below the current price. If that does not hold, the US markets will be selling off in a big way in my opinion. The emerging markets must eventually move up with the developed markets or it says the world economy is in trouble. The emerging markets have gone sideways for years now as the developed markets have charged ahead.
Who are our new customers in the developed markets? They are in the emerging markets. We must now rally together sometime soon. That may be days, weeks or a few months away, but if it’s a year or more off, you can forget seeing any decent returns in the developed indexes for months to come. In my opinion this failure of VWO is a negative prognostic sign for all markets.
The chart of the Emerging Markets (VWO):
As mentioned, investor sentiment is starting to flash caution signs. I covered the latest sentiment report this past week. Be sure to read it. You can access my thoughts after getting the password here: Free Subscription to My Newsletter and access to my latest comments I’ll send you back the password to the access page and the monthly newsletter in the same email.
I will also publish my BUY/SELL signals later today for the 6 major indices we invest in, including those discussed above. You can access all of it on the WSSSR access page referred to in the email you’ll get when you sign up at the above link. All the best in your investing and trading.
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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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