• 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 / Will Overbought Emerging Markets Tempt Traders?

Will Overbought Emerging Markets Tempt Traders?

January 4, 2012 by Trading By the Numbers

What, if anything, are active investors to make of the fact that the most overbought country funds heading into trading on Thursday are from Latin America?

It is a testament to the growth of the exchange-traded fund market that even such a statement is possible – let alone being a critical component of understanding how these markets are likely to move over the next few days. But as both growth in emerging markets and growth in the interest in trading and investing in emerging markets has exploded, so have vehicles like the iShares MSCI Chile Index Fund ETF (NYSE: ECH). The ECH, which tracks the equity markets of Chile, joins the iShares MSCI Brazil Index Fund ETF (NYSE: EWZ) as the two most liquid, single country funds for the South American continent.

How important is ECH? Even the iShares S&P Latin America 40 Index Fund ETF (NYSE: ILF), a regional fund, consists largely of stocks from Brazil – though the fund does include a handful of Mexican corporations among its top holdings. While there is no Bolivian ETF and no Peruvian ETF that is widely traded at this point, the rise of the ECH is a sign that their times soon may come.

Right now, these Latin American emerging markets have the complete attention of bulls, who have driven share prices into overbought territory once again. This means that traders and active investors currently on the sidelines who are looking to buy may only have to wait a few days for lower prices. And for those traders interested in selling short strength in bear market territory, the rallies in EWZ, ECH and ILF have taken the funds to levels where sellers in the past have been able to knock prices down.

Ahead of trading on Thursday, all three ETFs have closed higher for four days in a row, the last two days at extremely overbought levels beneath the 200-day moving average. EWZ, ECH and ILF all have “consider avoiding” ratings of 2 out of 10, and both EWZ and ILF have significant, short-term negative edges of more than 1%.

Can’t get enough stocks? Click here for more!

David Penn is Editor in Chief of TradingMarkets.com.

Filed Under: Commentary, Recent Tagged With: ECH, ETF Trading, EWZ, 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