• Free Book
  • Store
    • Books
    • Free First Chapters
    • Free Newsletters
  • Recent Articles

TradingMarkets.com

Quantified Stock Market Trading Strategies & Systems

  • Home
  • New Trading Research
  • Education
    • Articles
      • Connors Research
      • ETFs
      • Options
      • Stocks
      • Volatility
    • Trading Lessons
    • Connors Research
    • Glossary
    • Interview Archive
    • Videos
  • Python
  • Quantamentals
    • Quantamentals: The Next Great Forefront of Trading and Investing
    • Quantamentals Resources
  • Courses
  • Store
    • New Book! The Alpha Formula
    • “Buy The Fear, Sell The Greed” – Best Seller!
    • Swing Trading College 2019
    • Trading Books and Guidebooks
    • Street Smarts
    • Online Trading Courses
    • Private Mentoring with Larry Connors
    • Customized Trading Research
    • Amibroker Strategy Add On Modules
You are here: Home / ETFs / Commentary / More Selling, More Opportunities in Emerging Markets ETFs

More Selling, More Opportunities in Emerging Markets ETFs

March 20, 2012 by Trading By the Numbers

Yesterday’s column “China, Russia and the Breakdown in the BRIC ETFs” highlighted growing, short-term weakness in many emerging market country funds from the iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) to the Market Vectors Russia ETF (NYSE: RSX). Today, we’ll broaden the scope to look at regional exchange-traded funds that include more than one of these national equity markets.

For example, one of the more widely-traded regional ETFs is the iShares MSCI Emerging Markets Index Fund ETF (NYSE: EEM). Most heavily weighted by sector in financials, with basic materials and technology coming in second, the iShares MSCI Emerging Markets Index Fund ETF includes stocks like Samsung Electronics from South Korea, Gazprom from Russia, and Petroleo Brasileiro Petrobras from Brazil.

EEM climbed back into bull market territory at the beginning of February as part of a four-day rally that took the ETF into short-term overbought territory. The fund continued higher for another month, rallying to new, 6-month highs.

Since these highs, EEM has made two significant, short-term corrections. The first, coming immediately after those new highs, consisted of a three-day sell-off that took the fund into technically oversold territory for two consecutive sessions. Buyers swooped in after the second oversold finish, sending the stock higher by nearly 5% over the next five days.

The second short-term correction includes the current pullback. Here, the iShares MSCI Emerging Markets Index Fund ETF has moved lower in much the same way as before: three consecutive lower closes, with two in technically oversold territory above the 200-day moving average. What is especially interesting is that, in the previous instance, EEM earned “consider buying” ratings of 9 out of 10 the day on its third consecutive lower close (and second in oversold territory). So far, with EEM pulling back by nearly one and three quarters percent ahead of trading on Wednesday, EEM has earned a massive, four-point intraday ratings upgrade from a very neutral, 5 out of 10, to a strong, “consider buying” 9 out of 10.

Some of the other emerging markets ETFs that are earning significant ratings upgrades after pulling back on Tuesday include the Vanguard Emerging Markets ETF (NYSE: VWO), which earned a ratings upgrade from 6 out of 10 to 9 out of 10 intraday on Tuesday after pulling back by nearly one and a half percent, as well as the iShares MSCI BRIC Index Fund ETF (NYSE: BKF). BKF also earned a major ratings upgrade on Tuesday, climbing from a neutral, 6 out of 10, to a “consider buying” 9 out of 10, in the wake of a 2% pullback.

Shares of BKF have a positive edge of more than 3%.  EEM and VWO have short-term, positive edges of 1% and just over three-quarters of a percent, respectively.

When traded correctly, ETF Gap Trading can be one of the most consistent strategies available for your trading. Click here to learn more.

David Penn is Editor in Chief of TradingMarkets.com

Filed Under: Commentary, Recent Tagged With: ETF Trading, Trading By the Numbers

Buy The Fear, Sell The Greed

Buy The Fear, Sell The Greed

Swing Trading College

New Book From Larry Connors and Chris Cain, CMT – "The Alpha Formula; High Powered Strategies to Beat The Market With Less Risk"

We’re excited to announce the release of a new investment book written by Larry Connors and Chris Cain, CMT. The book, “The Alpha Formula; High Powered Strategies to Beat The Market With Less Risk “ combines… Hedge fund legend Ray Dalio’s brilliant insight into combining uncorrelated strategies… With new, minimally correlated, quantified, systematic strategies to trade… [Read More]

Buy The Alpha Formula Now

Connors Research Traders Journal (Volume 57): 7 Real-World Reasons Why Short Strategies Should Be Included In Your Portfolio

In our new book, The Alpha Formula – High Powered Strategies to Beat the Market with Less Risk, we show the benefits of including short-strategies in your portfolio. As a reminder, building portfolios should be based on First Principles – otherwise known as truths. These truths are: Markets Go Up Market Go Down Markets Go… [Read More]

Company Info

The Connors Group, Inc.
185 Hudson St., Suite 2500
Jersey City, NJ 07311
www.cg3.com

About Us

About
Careers
Contact Us
Link To Us

Company Resources

Help
Privacy Policy
Return Policy
Terms & Conditions

Properties

TradingMarkets
Connors Research

Connect with TradingMarkets

Contact

info@cg3.com
973-494-7311 ext. 628

Free Book

Short Term Trading Strategies That Work

© Copyright 2020 The Connors Group, Inc.

Copyright © 2023 · News Pro Theme on Genesis Framework · WordPress · Log in