MSCI Emerging Markets Index

MSCI Emerging Markets Index is The Index consists of the largest emerging markets, the largest share in the index have markets from Asia and South America. 

Country weights:

- China: 19,63%;

- South Korea: 15,87%;

- Taiwan: 11,85%;

- Brazil: 10,99%;

- South Africa: 7,33%

- other: 34,33%

They represent about 60 percent of the total index. More info:  MSCI Emerging Markets Index

Regarding technical analysis :). For me, the correction has not yet reached the end and I think in the next few months, we should be guided in the direction of 828 points, and for overcoming this resistance to 738 points (Chart 1).

Chart 1, iShare MSCI EM Index, 2013-09-13

The Chart number 2, present that the market after the downward wave (5 waves) in 2011 reached levels of 840 points. Then, market made a move ​​up consisting of three wave A-B-C (red letters on the chart). This was the beginning of the start of the flat correction which is simultaneously extended revision of the main trend. (correction A-B-C, white letters on the chart).

Chart 2, iShare MSCI EM Index, 2013-09-13

After making a flat correction. The market creates at the moment the last part of the main correction. This is a classic the correction consisting of five waves. Which should reach new lows. (charts 2 and 3)

Chart 3, iShare MSCI EM Index, 2013-09-13

However, that was not too easy is possible even more extensive correction. Talks about "tapered wedge a-b-c-d-e" (chart 4).

Chart 4, iShare MSCI EM Index, 2013-09-13

And only after it we should start of  classic the correction consisting of five waves.

It is of course a chance for the negation of my analysis. It will be wrong then only if the market breaks horizontal wave peaks A and C wave flat correction. These are the levels to within 1050 - 1100 points. Then start the third wave in the main trend, which always brings a big boom.

The main cause for concern.

Regarding Chinese economy, a few days ago we met important data

"Investments in real estate with respect to 14.1% of GDP (the second drop in succession).

Demand / GDP 13.4% - demand of deficit is 0.7% of GDP - is 23 months when demand is lower than the investment.

It will be important, which will show prices in recent months (despite the deficit in demand) grew strongly. If this trend will not slow down, the authorities in China will be forced to re-apply the restrictions that were behind the slowdown in the Chinese economy in the first half of the year.

Data regarding prices will be announced 18th September.



best regards,
oscarjp

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