China - Is the Bull Run Over?

On Friday FXI bounced off the 50-DMA but is there further downside?

Lets look at where we stand as of the close on Friday, Nov. 23, 2007:

• RSI is 44 indicating there is further to go to the downside before its oversold
• OBV is falling
• China bull newsletters are turning bearish
• FXI is down 21% from its Oct. 31 high on large volume
• FXP (Ultrashort version of the FXI) debuted on Nov. 8 and has quickly shot up to over 1M shares per day in volume. It will supply a steady short interest and downward pressure against the FXI. Since the debut, the ETF is now up 8%.
• Volatility continues to be in play, with large gap opens (up and down)
• Chinese government is trying to suppress the market by freezing lending
• The Yuan has been A stronger Yuan could hurt exporters by making some goods more expensive for buyers paying in dollars or euros.

I would expect that there will be a bounce and then further decline. FXP looks like the way to play this.