GMO is far more volatile than FXI and therefore accentuates the moves.
GMO appears to be alerting us to a downturn in the FXI .
It made sense to me to just go ahead an post this chart while I decide exactly how I would like to enter this trade.
Most likely I will buy GMO and sell short FXI , but I might only short FXI . It has also stalled from making new highs along with the US markets and could also be giving us a leading indication. The risk is small at only a few percentage points and the downside appears medium at 5% to 8%.
Tim 1:07PM EST January 28, 2013