Chinese Xinhua Index ETF (FXI)

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The following chart displays the weekly progress of the Ishares Xinhua China Index ETF. It is possible to also trade this decline through buying the Pro-Shares Ultra-short Xinhua China ETF (FXP).

This analysis indicates the possibility of a 43% decline for the Chinese Index ETF. This decline is expected to terminate at $23.26 during Early November 2010. I began by using the date of 29/10/2004. Then I looked at every date that is 360 Degrees from this starting point. The vertical dashed lines display when these dates occur.

The wave count is indicated by Gann and Fibonacci price targets. For the first decline labeled (A) (B) (C) we see the following price relationships:

*(A) is equal to 360 Degrees down from $72.82
*(C) is equal to 720 degrees down from $72.82 & it is 100% times (A)
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*The large upward rally with the primary label of B retraces exactly 50% of the previous decline.
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This ETF has a good history of following the declination indicator located at the bottom of the chart. If this relationship continues, it re-asserts the bearish outlook for the Xinhua Index.