Wednesday, July 11, 2012

Morning Market Analysis

The Brazilian market is still bottoming.  The market dropped about 28.5% from the beginning of March to the end of May, but is now moving sideways.  The 10 and 20 day EMA are moving sideways, but the longer EMAs are still trending lower.  Momentum is increasing, but the overall reading is still negative.  For a move higher to be "real," we'd need to see a move above the 50 day EMA.

The Russian market had a fall as sharp as that of Brazil -- moving from a bit over 33 to 23 over a three month period.  However, now prices are in a nice uptrend.  In addition, the shorter EMAs are moving higher and are about to cross the 50 day EMA.  Prices have already advanced above the 50 day EMA once.  Momentum has crossed into positive territory and money is moving into the market.

The Indian market is a mirror impact of the Russian market, although prices are in better shape as they are above the 50 day EMA.  Also note the improving EMA picture; the shorter EMAs are rising, the 10 day EMA has crossed the 50 day EMA and the 50 is now moving higher.  This chart indicates traders think India will rebound from its recent weakness.

The Chinese market is directly parallel to the Brazilian market; prices have fallen and are now moving sideways.

The Russian and Indian markets are sending encouraging -- albeit it early -- signals.  However, in an ideal world, we'd see China and Brazil move higher as well.  China is getting hit with all the negative news of late, while Brazil is close to 0% growth.  Put another way, the fundamental picture in both those countries is holding back a market rebound.