The Fed's decision to selectively lend $30 billion each to Mexico, Brazil, South Korea and Singapore to try to ensure financial stability in the emerging markets triggered a late-session pop in the iShares Emerging Markets Fund ETF (EEM). Notwithstanding the plunge in all equity indices during the final 10 minutes of trading yesterday, which extended into this morning. Let's notice that today's up-gap thrust the EEM to new recovery highs off of the October 27 low at 18.90. Let's also notice that my underlying hourly momentum gauge (RSI) has climbed to a new high for the move, but not yet overbought, which confirms the EEM strength and projects prices towards a test of the September-October downtrend line, now at 25.90.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.