EEM Emerging Markets ETF Daily Chart; EEM Round-Trips on the Year Thus Far Losing All Gains Returning to the Flatline

EEM, the Emerging Markets ETF, drops to where it began the year at 38. In January, traders were filled with wide-eyed optimism for emerging markets. Well, now they have buptkis. EEM is flat on the year testing critical support.

The purple lines show a H&S pattern in play that would target the October support. Head is 42.5, call the neckline 37.5 to make the math easy. That is a 5 difference so the downside target is 32.5, call it 32-34, if the 37.5 neckline fails.

The green lines show positive divergence at play. The falling green wedge is also bullish. The stochastics are flat and may dip negative but the other indicators are likely enough to create a bounce in the daily time frame. Price may want to back kiss the 200-day MA at 38.47 in the days ahead. However, the weekly chart is weak so the expectation would be for EEM to roll over and fail through the neckline on the multi-week basis ahead.

The gold circle shows the golden cross that formed after the October bottom. As Keystone always tells you, when a golden cross occurs, look for price to retreat, and it does. The 50-day MA is flat and the last 20 or more days are all prices below the 50 so it will be pulled lower going forward for a potential death cross in April or May (50 falling down through the 200).

If you own EEM long, you may want to consider selling on the potential pop during the days ahead and git out of Dodge. The biggest fool went long late January and is now holding the bag. Keystone does not hold EEM long or short and has not played it in a year or more. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.