Emerging Markets -- At Resistance

Back on Feb. 4, I wrote a piece on emerging market bond and stock funds. Back then, I found
both the emerging bond (EMB) and the emerging equities fund (EEM) at interesting technical
junctures. With global industrial output slated to perform moderately better in 2014 after a
sour period, it seemed appropriate to dust off these two trades. Now both are up at important
resistance levels Emerging Markets (Click on link and then click on the EMB and EEM Charts.)

The JP Morgan EMB has since moved up from the 106 level to 114.6. It has followed US
Treasury prices and is now well overbought and with Tresuries stabilizing after a good run, this
more volatile fund could be a bit risky following a nice recovery.

The EEM never reached the 35 level which would have made it a more prefect trade, but it
has rallied up to three year resistance and with the SPX weekly now moving up into overbought
territory, traders should keep EEM in mind as short term vulnerable.

Both the markets may be interesting over the next year, but the preference here is to let the
overboughts at resistance play out in the short run.