It has been 5 years since my last post, and about time too... this post comes from the encouragement of a buddy who is also my co-author in this blog.
First up, let’s take a look at home... using the SG ETF, ticker EWS, weekly chart shows the state of the Singapore market.
Since May, SG market began to deviate drastically from the US market (SPX overlay as y.ellow line). This deviation became stronger and is signaling something rather ominous, in my humble opinion. EWS went below its 55EMA, and MACD looks bearish. There is more downside to come as the next support is at the bottom of the range (grey box area), which is almost another 10% down from current levels. In some ways, it appears that this is possibly exerbated by an overall institutional outflow of funds from the SG market.
If that is the case, where are the funds going to? Or are funds moving out of Asia per se?
Looking at the China ETF, ticker FXI, weekly chart...
Similarly, the FXI deviated from its correlation with SPX in May and fell significantly. Technically devastated, there appears to be a lower target in sight for the breakdown of the uptrend line, marked out by the red oval. The target is a good -7% from the current levels. This deviation is most likely due to the expectations of a trade war risk, with China expected to be a larger loser in the end, and China returning slower economic numbers of late.
One star caught my eye of late, and that is the mystical India market ETF, ticker INDY...
Although deviating off its correlation from SPX in May, there was a change in July and against many technical odds, the India market found fresh life to turn its MACD positive, breakout of resistances and commit with a recent push forward. There should be more in this breakout, much more. India’s market is one to watch as it appears to be trending now...
Charts are from TradingView.
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