EEM and HYG

So, guess, of late, all the rage is the EEM new bull market.

VERY HARD to believe but … let’s remove the subjectivity and pull out some patterns:

EEM:

  • banging right into .618/.786 retracement confluence – usually very strong R or S. in this case R.
  • Note – a basic projection takes us up into the 45-46 area
  • Double trend line resistance

HYG – high yield debt

  • note, it’s been hanging at the .618 for basically 4 months … sure looks like it wants to break out higher.

IF HYG breaks the .618 expect the EEM to target the upper zone of the red box …

IF HYG does not break above the .618 and starts back down THEN perhaps the EEM will start down from current levels.

either way, believe we can goose a little more in the EEM world and the HYG world but .. stiff resistance ahead.

Also, note how correlated HYG (high yield DEBT) is w/ the EMERGING MARKETS (EEM) … hmmmmmmmm

Bart

 

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