Markets concluded the week Friday with losses as the Nasdaq dropped .6% and the S&P 500 by .7%, although volume was soft. For the week the S&P 500 was UNCH and the fell .3%. The Nasdaq is lower 5 of the last 7 weeks, but a peek on its weekly chart shows the last 3 weeks have all CLOSED within 19 handles of each other. This type of action leaves both bulls and bears with reasons to argue their cause. Bulls would contend that the benchmark is just pausing near 15 year higher for another leg up. Bears would suggest this action could be churning, with the possibility of a huge double top near this 5100 mark. We like to focus more on the Nasdaq as it has been the leader, higher by 6.7% YTD compared to the 1.7% advance of the S&P 500, and how the leader behaves will often give early signals as to when potential issues may arise. The S&P 500 did undercut its 50 day SMA very quickly after recouping it, normally a bearish development. Spanning the globe and a country which has been in the news plenty recently, Chinese ETFs look interesting to me. The FXI is higher by 18%, almost triple that of the Nasdaq YTD and its chart intrigues me. The round number theory comes into play here with the 50 handle being critical. The last 3 weeks have seen CLOSES underneath it and it also corresponds with the 50 day SMA. It rests 7% off recent 52 week highs and we think offers a good entry right here for more aggressive traders or an entry with a move above the 50 day SMA.

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