Wednesday, January 12, 2011
This is interesting as FXI pounds through the resistance and the SMA 50. As a leader it is another NOT BEARISH sign for the broad market short term. As for my FXI position, I will likely hold it for as long as I hold short the SPX, or maybe even longer, since this is a play on the "global leveling of the playing field" of which, I am ultimately a proponent. http://www.biiwii.blogspot.com
We have watched the China 25 ETF (FXI) as a leader of both the US and global rallies, and as an indictor for emerging markets, which generally being resource and commodity based, tend to rely on China and the perception that the China story is strong.
While many emerging markets and commodities remain relatively strong, the FXI took a
healthy correction, as word out of Central Planning is that monetary policy is being
tightened to rein in inflation.
I like this chart on a relative basis, given that this is a rare market that has tested its SMA
200, and the government it is associated with is at least talking sensibly. FXI has
declined from predictable resistance at the SMA 50 and it will be interesting to see what
it does here above the noted support level around 42.