This would allow traders and active investors to begin trading the fund from the long side for a change, taking advantage of short-term weakness rather than short-term strength as the bull market in FXI is restored.
Interestingly, although short-term strength below the 200-day moving average in FXI has historically been short-lived, if the ETF does become overbought enough and remain so long enough, then a finish on the bull market side of the 200-day could happen as early as next week.
Expect a Romney victory to spur short-term dollar strength, which could come in tandem with a knee-jerk rally in equities.
But shareholder support group ShareSoc urged Faroe stakeholders to vote against the scheme, claiming it would encourage a focus on the short-term share price instead of the fundamental strength of the business.
The recovery plan and the financial stability plan are the immediate steps we're taking to revive our economy in the short term, but the only way to fully restore America's economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world.
Yet, this in turn could also provide some pressure in the short term if weakness in equities and risk assets leads to strength in the U.S. dollar, he said.
While the market could continue to rise the indicators that show short-term overbought conditions such as the RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) are both solidly in overbought territory.
Here, traders will have to be patient for strength below the 200-day, similar to the short-term overbought conditions in bond ETFs from a year ago in 2011.
The Relative Strength Index reading has been around 70 lately, considered overbought in the short term.
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If I am correct that the market has further to go on the downside intermediate-term, but likely to experience a short-term oversold rally, such a rally would provide another opportunity to sell into the strength and even take downside positions.
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As such, the real test of the strength and longevity of this recent rally will not come from the first short-term correction of a few percentage points, for buyers will show up on these first forays down.
And China we all have great hopes for, but it doesn't have the strength yet to be the global engine, and of course, they're battling short term with SARS. South America is still struggling both with currency issues and of course political issues.
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