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My Mentor, Sir John Templeton, was a strong believer in “buy at the point of maximum pessimism!” Unless you live under a rock, you are well aware that Emerging markets have not only had a few rough years, they’ve also had a rough start to 2014 (EEM down 9% YTD).
The above 4-pack reflects that ETF EEM, Shanghai, Hang Seng and the CRB commodities index’s are all setting on multi-year support lines. The media outlets are all over the story, per how weak Emerging markets are and have been.
I believe the outcome of these patterns are not only important for the emerging arena, I believe how they handle these support lines, will have ripple effects on the major index’s in the states and Europe.
I have no positions in this area at this time. I am a believer in buy low/sell higher and like buying on support. The reason for this post is….to share out of favor assets on support and share that the action of the emerging markets over the next few weeks becomes more important than usual in my humble opinion.