Both the iShares MSCI Emerging Markets ETF (EEM) and the Golden Dragon China ETF (PGJ) have experienced a quick pullback and a nice recovery. EEM is still a bit stronger than PGJ, but both ETFs are doing well and have climbed atop their 200-day moving averages. Our intermediate-term Emerging Markets Timer remains bullish, and having EEM and PGJ both surmounting their 200-day moving average is a good sign for the longer-term trend. Momentum is an important part of our strategy, and an uptrend with longevity is stronger than one without.
The major indexes were all up during the morning session, but dipped in the afternoon to close narrowly mixed. The Dow fell 32 points (0.18%), the S&P 500 lost 4 points (0.20%), and the Nasdaq rose a scant one point (0.01%). The iShares MSCI Emerging Markets ETF (EEM) was flat, down 0.03 cents (0.09%) to finish at 34.25.
This is an excerpt from Cabot Emerging Markets Investor, which seeks to capitalize on the enormous potential in emerging market countries. Chief Analyst Paul Goodwin has been a researcher and writer for over 30 years and a member of the Cabot investment team since 2005.