Aside from being on the wrong side of the market with my
current S&P500 index short trade, there are several other things
that have me puzzled about the market's ascent. One of these conundrums
is the i-Shares FTSE Xinshua/ China 25 (symbol: FXI).
We last looked
at FXI on January 27, 2010, and we identified the $42 level as resistance,
and as you can see from figure 1, a weekly chart of FXI, this area remains
resistance. Several reasons why this chart should be troubling for equity
bulls: 1) FXI has not made new highs while the US indices have; 2) China
led the markets out of recovery finding a bottom in October, 2008, which
was several months before the US found its footing, so could China (and by
proxy FXI) be leading the markets lower?
Figure 1. FXI/ weekly
I know stocks only go in one direction, but some former Indian chiefs (i.e.,
the FXI) are not cooperating.
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