All four days this week have been about recovering from last week’s action; I suspect/hope the unraveling can resume on schedule next week. Aligned with that, Japan is setting itself up for a bigger fall than we’ve seen for a while. If DXJ can fight its way back to about $47, I think it will provide the proverbial lay-up shot of a shorting opportunity.
My largest short heading into the day was EEM. In spite of yet another ridiculous mini-rally this morning, things are once again falling to pieces. As the daily chart shows, the repetition of buying-based-on-unicorn-farts followed by a stall (tinted thrice) and then a plunge-based-on-reality is getting a little predictable.
It’s pretty sad when China (of all places) is the hallmark of honest markets that represent true value. Maybe what they need is a good dose of Diamond Shreddies.
It’s refreshing to see a market move with graceful predictability. The Chinese ETF for the Shanghai Composite, shown below, has been flowing in a much smoother pattern than – oh, let’s say for example – the U.S. markets. A goodly portion of its likely drop is done, but it looks like a continuation down to about 31.50 is most likely.
I have no idea what the Mexican economy encompasses besides illicit drug smuggling and the manufacturing of diabetic citizens by way of Coca Cola, but whatever it is they make down there, it’s not going well. I remain cheerfully short.