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For a full year now, the emerging markets fund EEM has been following a relatively smooth descending channel, bouncing between support (green line) and resistance (red line). It doesn’t always make it all the way to the line, but there’s no doubt that, with all that has happened over the past twelve months, EEM has been pretty predictable with respect to turning points. I’d say it’s getting close to resistance yet again.
If that is true, it would seem to suggest that long-suffering EFA bears might be in for some serious relief. I say again that this is one of my favorite patterns right now, and although it could take a solid six weeks to really get some good downside on this, it could very well be worth the wait.