Chinese stocks fell sharply in recent days as traders grew even more worried about the spat between the U.S. and China. A looming July 6 deadline is set to see the U.S. impose a 25 percent tariff on $34 billion worth of Chinese goods from more than 800 product categories. China has also announced that it will retaliate with duties on the same value of U.S. products. The iShares China Large-Cap ETF (FXI) fell 2 percent Monday, down 8.8 percent YTD. Now the question is whether recent selloff is a beginning of an end or there’re more pains ahead? Below is an update look at a trade in FXI.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.
Chart 1.1 – iShares China Large-Cap ETF (weekly)
Our “U.S. Market Trading Map” painted FXI bars in red (sell) – see area ‘A’ in the chart. After a strong run of outperformance since early 2016, FXI peaked in late January 2018 and rolled over. The late June massive selloff took out the one-year moving average, indicating the 4-month flat flag had resolved itself into a new downswing…Click here to read more.
You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.
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