Welcome to The Market’s Compass Rising Market’s Nation ETF Research, Week #591. As all the time, it highlights the technical adjustments of the 20 EM Nation ETFs that I monitor on a weekly foundation and publish each third week. Paid subscribers will obtain this week’s unabridged Rising Market’s Nation ETF Research despatched to their registered e-mail. Previous publications might be accessed by paid subscribers by way of The Market’s Compass Substack Weblog. Subsequent week I will likely be publishing The Market’s Compass Developed Markets Nation ETF Research. On Sunday I printed the most recent version of The Market’s Compass Crypto Candy Sixteen Research which I publish on a weekly foundation and tracks the technical adjustments of sixteen of the bigger capitalized Cryptocurrencies.
To know the methodology utilized in establishing the target EM Nation ETF Particular person Technical Rankings go to the mc’s technical indicators web page at www.themarketscompass.com and choose “em nation etfs”. What follows is a Cliff Notes model* of the total rationalization of the methodology I exploit…
*The technical rating system is a quantitative strategy that makes use of a number of technical concerns that embrace however should not restricted to pattern, momentum, measurements of accumulation/distribution and relative power of every particular person 20 EM Nation ETFs that may vary between 0 and 50. The Whole EM Technical Rating or “TEMTR” is the sum of the twenty particular person TRs and might be considered as an overbought / oversold indicator in addition to a affirmation / non-confirmation indicator. There’s additionally a Whole Rating for every geographic area that may be considered as a relative measurement on every week over week foundation.
This previous week The Whole EM Technical Rating or “TEMTR” rose 30.13% to 637 including to the earlier week’s 29.50% acquire to 489.5 from 378 three weeks in the past. The Whole EMEA Rating rose the a lot of the three geographic areas final week, +46.0% to 182.5 from 125 two weeks in the past when it rose 59.2% from the week ending 3/27 when it reached its nadir at 78.5. Final week the Whole Asia-Pacific Rating rose 33.2% to 251 from 188.5 the week earlier than. The Whole Lat AM Rating rose 15.6% to 203.5 from 176 the earlier week.
All twenty EM Nation ETFs I monitor in these pages registered features of their Technical Rankings or TRs over the previous week reflecting the broad-based enchancment within the technical situation of the EM ETFs. Final week 9 of the TRs have been within the “inexperienced zone” (TRs between 34.5 and 50), 9 have been within the “blue zone” (TRs between 15.5 and 34), and two have been within the “crimson zone” (TRs between 0 and 15). The earlier week solely 4 TRs have been within the “inexperienced zone”, 9 have been within the “blue zone”, and 7 have been within the “crimson zone”. Not presently or since February 28, 2025, has there been a Lat AM ETF Technical Rating within the “crimson zone”.
*To know the development the of The Technical Situation Elements go to the Market’s Compass web site www.themarketscompass.com and go to the mc’s technical indicators web page and choose “em nation etfs”.
A brief model of the how the Technical Situation Elements are calculated follows…
There are eight Technical Situation Elements (“TCFs”) which are a summation of the twenty ETFs TRs technical situation of every TCF query. The eight Technical Situation Elements don’t ask the identical variety of questions. That’s the reason it’s calculated as a share. If a TCF particular person studying is 100% that may imply that each one Twenty ETFs fullfilled that specific TCF criterior.
This previous week a studying an overbought 96.43% was registered within the Every day Momentum Technical Situation Issue (”DMTCF”) or 135 out of a attainable whole of 140 optimistic factors.
As a affirmation device, if all eight TCFs enhance on a week-over-week foundation, extra of the 20 ETFs are enhancing internally on a technical foundation, confirming a broader market transfer larger (consider an advance/decline calculation). Conversely if all eight TCFs fall on a week-over-week foundation it confirms a broader market transfer decrease.
Final week, seven TCFs rose, and one was unchanged confirming the broader EM market transfer larger however the “DMTCF” recommend a stretched technical situation.
The Relative Rotation Graph, generally known as RRGs have been developed in 2004-2005 by Julius de Kempenaer. These charts are a novel visualization device for relative power evaluation. Chartists can use RRGs to investigate the relative power traits of a number of securities in opposition to a typical benchmark, (on this case the EEM) and in opposition to one another over any given time interval (within the case beneath, every day) over the previous three weeks. The facility of RRG is its skill to plot relative efficiency on one graph and present true rotation. All RRGs charts use 4 quadrants to outline the 4 phases of a relative pattern. The Optuma RRG charts makes use of, From Main (in inexperienced) to Weakening (in yellow) to Lagging (in pink) to Enhancing (in blue) and again to Main (in inexperienced). True rotations might be seen as securities transfer from one quadrant to the opposite over time. That is solely a short rationalization of find out how to interpret RRG charts. To be taught extra, see the publish scripts and hyperlinks on the finish of this Weblog.
Not all 20 ETFs are plotted on this RRG Chart. I’ve carried out this for readability functions. These which I imagine are of upper technical curiosity stay.
Regardless of the lack of Relative Power Momentum final week, the World X MSCI Columbia ETF (COLO) nonetheless retains its “better of the 20” pole place on a Relative Power foundation at 104.16 (see the Tabulation Desk beneath). Over the previous three weeks the iShares MSCI Malaysia Index Fund ETF (EWM) has clocked a 3 Quadrant transfer by falling out of the Main Quadrant, via the Weakening Quadrant and ending final week coming into the Lagging Quadrant exhibiting falling Relative Power Momentum (see the Tabulation Desk beneath). In a noteworthy restoration, the iShares MSCI Brazil Index Fund ETF (EWZ) has displayed a formidable rebound by rising out of the Lagging Quadrant and into the Enhancing Quadrant and is just one good day away from coming into the Main Quadrant.
The “Tabulation Desk” beneath marks the Relative Power and Relative Power Momentum readings vs. the iShares MSCI Rising Markets Index ETF or EEM. It begins with the readings on the finish of final week adopted by the trailing three weeks that features the readings from the final Research for the week ending 1/16. If there was an enchancment in both the Relative Power Ratio or the Relative Power Momentum studying on a week-over-week foundation I’ve highlighted it in inexperienced. If there was a contraction in both, it’s highlighted in crimson and an unchanged studying in both will stay black. The colour-coding system serves as a warmth map over the previous 4 Friday’s readings highlighting both the continued enchancment, deterioration, or stasis vs. the benchmark, the EEM. The ETFs which are displayed on the RRG chart above are highlighted in blue.
*The “TEMTR” is the sum of the 20 Particular person Goal EM ETF Technical Rankings. It serves as an overbought or oversold in addition to a affirmation / non-confirmation indicator.
Final Wednesday’s sharp rally was doubtless fueled partly by quick overlaying and a dramatic reversal within the USD, however it could be folly to argue with the impulsive nature of the decisive worth transfer. The “TEMTR” rose in live performance with worth because it blasted again above the 13-Week Exponential Shifting Common. Evidently, the prospect of peace within the Center East is tenuous at finest and I might anticipate that the worth hole (proven within the Every day chart that follows) will doubtless be crammed because the iShares MSCI Rising Markets ETF (EEM) retraces the rally.
*The “ATR” just like the “TEMTR” serves as an overbought or oversold in addition to a affirmation / non-confirmation indicator.
The Decrease Warning Line (gold LWL) of the Schiff Modified Pitchfork (gold P1-P3) turned assist to additional promoting within the EEM and final week the ETF retook the bottom above the damaged Decrease Parallel (strong gold line) and each the Kijun (inexperienced line) and Tekan (crimson line) Plots. The Common Technical Rating (violet line below the worth panel) turned abruptly larger with the +7.0% rally final week and has edged its approach via each transferring averages. The shorter-term 8-Week Stochastic Momentum Index (heart panel) had grow to be oversold and has turned again via its sign line. I’m now marking key assist on the P3 pivot low at 52.50.
Find out about Pitchforks and their utility within the three-part Pitchfork tutorial on the Market’s Compass web site, www.themarketscompass.com
Extra on the technical situation of the EEM in Ideas on the Brief-Time period Technical Situation of the EEM however first…
*Doesn’t embrace dividends if any.
All twenty EM Nation ETFs have been up on an absolute foundation final week. 5 of the EM ETFs outperformed the +7.2% acquire within the EEM on a relative foundation and fifteen underperformed. The common five-day absolute acquire within the Rising Markets ETFs was +5.52%, including to the +3.41% acquire the earlier week.
The EEM rallied again into the Cloud final Wednesday and as of final Friday the EM ETF remained within the confines of the Cloud. The 8-Day Momentum Stochastic Index (heart panel) bounced from oversold territory to an overbought studying on the finish of the week. MACD turned larger as nicely, overtaking its sign line and is again in optimistic territory. The EM Nation ETF Every day Momentum / Breadth Oscillator turned at a better low when costs fell to new lows (vertical dashed line) giving a strong indication that draw back worth momentum had reached an excessive in live performance with breadth enhancing, however the Oscillator has grow to be stretched as nicely. Costs will doubtless check Cloud assist and worth and the Kijun Plot assist on the 57.71 degree prior to later.
All of the charts are courtesy of Optuma whose charting software program allows anybody to visualise any knowledge together with my Goal Technical Rankings. The next hyperlinks are an introduction and an in-depth tutorial on RRG Charts…
https://www.optuma.com/movies/introduction-to-rrg/
https://www.optuma.com/movies/optuma-webinar-2-rrgs/
To obtain a 30-day trial of Optuma charting software program go to…
