Steady Green Light

by Paul Goodwin on August 21, 2014

This is an excerpt from Cabot China & Emerging Markets Report, which seeks to capitalize on the big boom in China and other emerging market countries. Editor Paul Goodwin, Cabot’s international investing guru, provides your passport to profits.



The Cabot Emerging Markets Timer remains in good shape, and our stocks are generally holding up well.

U.S. markets have strengthened again, with the S&P 500 booking gains on eight of the last 10 trading sessions and regaining new-high ground. Ditto for the Nasdaq. The laggard Dow has made the same kind of run, but hasn’t hit new-high territory. All in all, it’s a strong market, with the PowerShares Golden Dragon Halter USX China ETF (PGJ) continuing the rally it’s been working on since early May. The dip this week in the PGJ doesn’t look threatening, being generally in line with similar corrections in June, July and August. The PGJ is solidly above its 25- and 50-day moving averages, giving us a steady green light.

With earnings season out of the way (without much damage to the portfolio), the next phase of the market will come toward the end of August, when the Big Dogs come back to work after their vacations and begin to make their moves. For the big portfolios, that will mean positioning portfolios with an eye toward the end of the year. And all we need to do is watch the action.

U.S. markets opened strongly and finished up for the three major indexes, although the Nasdaq didn’t break into the black for good until the afternoon session. At the close, the S&P 500 was up 6 points (0.30%), the Dow gained 60 points (0.36%) and the Nasdaq rose 6 points (0.12%). The PowerShares Golden Dragon Halter USX China ETF (PGJ) finished down 0.26 points (0.78%) to finish at 33.23.

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