Who will be left holding the Bag
As tariff and corporate tax turmoil put a shadow over the world economy and hope and hype still rein over everything, it will be interesting to see which country or group of corporations will take the hit. Will it be China or the US or will it be one of the big US sectors, technology, retail, or manufacturing companies?
One of the first pieces to the puzzle that we are watching is the China ETF FXI. Here is the weekly chart since the start of our election year 2016. For us the double top of early 2016 and early 2018 prices loom, and most interesting. the two big volume weeks, the 2016 decline on high volume and the 2018 price rise on high volume (probably due to US Corporate cuts). To us this currently means a big trapped group of investors above 46.00 and it is interesting that the recent 20 percent rise from December lows (probably a combination of anticipated tariff resolve and US FED actions) is running into resistance around that level.