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Matthew Crews
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Matthew Crews, CFA is a registered representative of Smith Patrick Financial Advisors, LLC, a fee-only advisor in Saint Louis. Matthew's focus is on building durable portfolios for clients using a wide range of ETFs for diversification. Given that clients portfolio's don't exist in a vacuum, Mr.... More
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  • Symmetrical Triangles Redux 0 comments
    Aug 15, 2012 10:47 AM | about stocks: EEM, EFA

    Here is another long-term look at the competing trends that are taking place in the global equity markets. Kimble Charting Solutions shows the triangles in both the developed international equity market (NYSEARCA:EFA) and the emerging market equity market (NYSEARCA:EEM).

    I continue to see downside risk here as the intermediate trend is downward from the 2011 peak. Early 2012 was above the 10-month trend for these two ETFs but the May swoon broke the trend. Currently EFA and EEM are both slightly above their respective 10MMAs.

    The challenge that I see is that if the intermediate downward trend remains the dominant trend then the above 10MMA trend will likely not persist. The biggest whipsaw however has been International REITs (NYSEARCA:RWX) which only briefly broke its 10MMA in late May/early June only to rebound strongly and break the intermediate downward trend.

    (click to enlarge)

    blog.kimblechartingsolutions.com/2012/08.../

    Lastly, match the price trends with fundamental data in Europe and China coming in weak and I have a difficult time seeing upside. (Note however that valuations themselves are likely improving for future positive returns once these economies recover.) Therefore I am tending to weight caution above optimism at the junction.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in EEM, EFA over the next 72 hours.

    Stocks: EEM, EFA
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