Cycle Trading: Another Look at Emerging Markets

I believe that there is a long term opportunity unfolding in the Emerging Markets, which we began discussing on July 5th.

Emerging Markets, EEM, have formed a swing low and closed above the declining trend line to confirm that day 22 hosted the daily cycle low.  And with EEM being in its timing band for an intermediate and yearly cycle low, the new daily cycle has good odds of triggering both the new weekly and new yearly cycle.

EEM has been in a multi year consolidation for over 10 years.  It recently broke out of consolidation in December, peaked in January, and then began its yearly cycle decline.  As previously mentioned, EEM is in its timing band for a YCL.  EEM is rallying off of support from the rising 20 month MA.  The decline into the YCL has caused EEM to back test the break out for the multi year consolidation.  The formation of a monthly swing low will indicate that EEM has begun a new yearly cycle.  And that is has also successfully backtested the multi year consolidation.

The Nasdaq recently broke out of is multi year consolidation and backtested its resistance level.

After the Nasdaq backtested its resistance level it was off to the races ...