Chinese equities were mixed over the past week. After surpassing domestic equities roughly 2 weeks ago, the international equities groups still sit in first place on our DALI asset class rankings. Internationals continue to extend the lead, as the asset class now maintains 10 signals above its domestic equities counterpart. The KraneShares Tactical model (KRANETACTEM.TR) remains fully invested in emerging markets outside of China, as those areas have shown the most strength in recent months. This week, we highlight:

The KraneShares MSCI Emerging Markets EX China Index ETF (KEMX) completed a double top break at $43.50, marking its fifth consecutive buy signal. KEMX is up 3.4% over the past week, and over 18% year-to-date. Additionally, the fund offers a yield of ~2.9%. The weekly OBOS indicates that the fund is in slightly overbought territory, so wait for a slight normalization of the 10-week trading band before considering. Strong support can be seen at $41, with additional support at $40. Resistance can be seen at $49.

The table below is a review of important technical data on a select group of KraneShares ETFs. Significant changes within the past week are highlighted in Green if positive or Red if negative. This portfolio is designed to be used as a "radar" screen to bring your attention to potentially important technical changes that may require your attention and potential action. When evaluating the Fund Score, the strongest issues have scores of 4 or higher while those ETFs with scores below a 3 are no longer considered solid citizens.

The distribution curve places each ETF on a bell curve according to their respective degrees of overbought or oversold status using a 10-week distribution. ETFs that are statistically oversold will appear on the left-hand side of the bell curve, while those that have become statistically overbought will appear on the right-hand side of the bell curve. Perhaps the most useful attribute of this feature is that it displays the entire universe on the curve at one time to give us a general picture of whether the KraneShares ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong relative strength ETFs that have regressed back toward mean conditions based on market weakness, or have become oversold based upon extreme market weakness. Weekly Distribution is a short-term gauge that is most helpful in timing entry and exit points, while the longer-term information of trend and relative strength is a more controlling factor in the decision of whether to buy or sell.

Legend:

• UPPERCASE indicates that the RS chart is on a buy signal.
• lowercase indicates that the RS chart is in a sell signal.
• GREEN lettering indicates the ETFs trend chart is on a buy signal.
• RED lettering indicates the ETF is on a sell signal.
• Box Color indicates the Sector Status Rating. Green = Favored, Yellow = Average, and Red = Unfavored.

The KraneShares Dynamic China Rotation Model is designed to identify major themes in the Chinese marketplace through the use of the Point & Figure relative strength tools. For more information on the portfolio construction and back testing, see the model info file on the models page.  (Note: The KraneShares ETF Models will be updated Tuesday mornings by 9:30 am EST) 

Weekly Changes: 

* - Dates prior to 10/15/2019, which is when the KraneShares Dynamic China Rotation Model became available on the NDW Research Platform, are representative of when the position was added to the backtested model.