Global indexes hitting resistance

Others have suggested that the bear market in global indexes has further to run (i.e. China: Fun Bear Market Rally from The Financial Ninja) but a quick look at the charts suggests that many indexes are hitting resistance.

I have not done a comprehensive survey, but here are the first four non-North American ETF's that I examined.

FXI (iShares FTSE/Xinhua China 25) -- here's 18 months of data, with a descending trendline from the Oct 2007 highs still in play. FXI has retraced 23.6% of the fall from the highs, in a possible bear flag structure, with descending volume. It was just sharply rejected from the Fib after poking above the trendline. Now for the test of support.


EEM (iShares MSCI Emerging Markets) -- similar story to FXI, with some subtle differences. The trendline that's in play is from the May highs, and EEM has poked above this trendline on a few occassions, including two days ago. The bear flag is also clearer on this chart.



BKF (iShares MSCI Brazil, Russia, India, China) -- similar story to FXI and BKF (no suprise) but a more bullish chart as BKF broke out above the down trendline before being rejected by the 23.6% Fib. This last move could easily turn into a kiss back of the break out point before this index moves higher.


Th breakout in BKF is an interesting divergence from EEM and FXI especially as these three ETF's have many similar components. The snap back in BKF is partially caused by the Indian stock market, whcih has been rocked by an accounting fraud scandal these past two days.

Moving to the developed markets, here's EFA (Europe Australasia Far East Index iShares). A simiarl story to EEM, with a dscending trendline, once pierced, but still in play. The fib that seems relevant is from the May highs, not the 2007 highs.