If all remains 'normal' technically, EEM will top out at that thick resistance area that is in essence the neckline of a topping pattern. For good measure, there is moving average resistance and a bad MACD signal as well.
But so many people (first and foremost one of this chart guy's bestest financial market buddies) say charts don't work, so feel free to go with their view. After all, the fundamentals told these guys to be bearish copper in 2009, while the charty said 'errr... bull'. It was all there in black, white and a bunch of squiggles (and divergences... and sentiment... and monetary policy data - like yesterday's money supply graph).
I will just keeping finding low risk PH type situations, future risk EEM type situations, low risk gold miner situations and yes, and even high risk gold situations like last week's very profitable extravaganza.
Sometimes I want to say it's like shooting fish in a barrel (I wouldn't tempt fate like that) but in reality, charting is just a very important tool for measuring probabilities. Usually the methods I use end up being proved out with respect to the probabilities. To hell with what the geek haters say. We move forward with our simple 'if/then' statements and always limit or take on risk as appropriate.
So let's see what EEM ends up saying (and PH too, for that matter). Sentiment got so over bearish that the rebound could persist and float a good chunk of the remainder of 2011, but technical damage has been done to global stocks, and it is not likely to be undone by one last chance power drive rally born of way too much bearish sentiment and fear.
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