Week 20 Global Markets Trending and Performance
Mexico has been the best performer this year and I have used EWW to trade it to the upside. I closed the trade but EWW trending still looks good. Japan EWJ seems to be starting to pick up perhaps with strong interest from Mr. Buffett.
Note that all these global market instruments that I track and trade are traded in the US exchanges in US dollars.
Trending Heat Map
Like the US markets, most of the global markets are also trading in a tight range. So, in some respects, the trending could be misleading. For example, China FXI is technically trending perfectly bullish, but price action has been mostly flat. And today, in pre-markets as I write this, FXI is down close to -2%. So, the trending may even weaken today.
The 2 exceptions to this crowded trading range are EWW (Mexico) and Japan (EWJ). These are genuinely trending perfectly bullish. I did put on a short-term long trade on EWW that was profitable. Mexico seems to have benefited from the US strategy for near shoring.
Performance
Mexico EWW, Germany and Brazil EWZ have been the story so far this year. Surprisingly EEM has been subdued likely because of the underperformance of FXI. China is over 30% of the EEM. Here is the country exposure of EEM:
EEM is a very liquid instrument and I do like to trade it. There is a chance that it breaks out to the upside, and I will be ready for that. Although the trending looks fine on paper, the chart tells a slightly different story.
The price needs to come out of that wedge in a meaningful way in either direction to make it tradable.