Is EWT's Move Over?

Here's a couple chart of EWT, an ETF in the US Markets that tracks the TAIEX.



Here's a 9 month chart of EWT. Today's gap down in EWT takes us below the ascending diagonal that has contained the bottom side of this bear market rally since the start of this move back in March 2nd. What I would like to see this week is for that trendline to hold the upside of EWT, basically meaning it would not fill the gap it created. Following is a 60 day chart.



Should get a good idea of where the trendline is now. Also, with another end of the day, rip your face of rally, we got a backtest of that line and bounced off the line. A closer look on the 2 day chart shows you how well this trendline worked.



Amazing huh? Anyways, what are the implications for this back in Taiwan? Well, assuming that this correlates well with the TAIEX moving down, the KMT and Ma Ying Jeou may actually get run into more problems later on this year. I'm contributing the recent indifference towards what Ma is doing to the fact that the general population's stocks have been doing well over the past couple months.

It's pretty easy to see that Ma Ying Jeou's approval rating has fallen (last year) and risen (this year) along with the stock market. With a falling stock market (potentially to resume soon), will likely come falling approval ratings on Ma Ying Jeou and likely the government (KMT controlled in general).

The DPP should take hold of this opportunity to gather support from the public against Ma and the KMT's recent policies of One-China economy and their push to unify Taiwan and China in all but name.

Disclaimer: No position in any Taiwan stocks, but I will be looking to play Taiwan to the short-side upon confirmation of the above.