Shifting Focus As Russia and China International ETFs Improve
International markets, Russian and China, have been showing signs of changing trends over the past few weeks. Some additional international country ETFs have already launched bullish reversals over the past few weeks. The changing conditions are becoming more apparent, as US domestic markets remain in a sideways consolidation pattern. We are focused on the latter, as the S&P 500 languishes in a sideways consolidation pattern for more than twenty-five (25) trading days.
Russia (RSX) ETF
The Russia ETF is forging ahead for a fourth week. A potential break above previous pivot highs formed in late August seems highly likely. We are considering a position in this ETF should price action break above 22.50. Targets are the 2018 pivot high at (24.50) approximately 12% higher from Monday closing levels.
Vanguard International Funds (VGTSX~VWLIX)
Several well known international funds are looking more bullish, having consolidated 2016 through 2018 gains (+62.75%) by only pulling back to a 38.2% Fibonacci retracement. We have a position in VWLIX in our retirement accounts. The so-called “Admiral Fund” trends similar to VGTSX.
China ETFs and Funds could also gain traction in the short-term as the country comes into sharper focus. NAFTA agreements have been reached with Canada and Mexico. The European Union has previously agreed to negotiations in the best interest of Europe and the United States, so that leaves China and Japan. The latter will most likely be next.
Bottom line. Lessening trade war fears as U.S. domestic equity markets trade into the best three months of the year. Caution is warranted none-the-less. Futures are off the premarket lows.
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