FXP (long) Position Management

We first looked at an FXP (2x Short China 25) trade set up in August, Trade Set-Up FXI / FXP, we let the trade come to us on our terms and entered on Sept. 9th, Trade Idea: FXP (Swing to Position Trade) Long.

Since, we have gathered a 23.4% gain since Sept. 9th. All of the near term evidence suggests we see a U.S. market bounce as we expected in last Friday's week Ahead, after the quarter and Window Dressing ended, so far we are on track. China is likely to follow, although I think it's a short term move, you still may want to take action in positions like FXP in which we have a nice gain in a short period to protect the gain and re-enter the trade when the bounce looks to be over.

 First the daily FXP hanging man bearish reversal candle and on volume, is not a good near term sign for this China 25 2x short ETF.

The X-Over system applied to FXP gives a long signal and a pullback target to the area of the 22-bar moving average around $50.

The 1 day trend channel has a stop a bit higher, I think a wider 2-day is more appropriate...

And that puts the stop somewhere around $50 as well

FXI, China 25 long is showing a 15 m positive divegrence meaning FXP should pullback as FXI bounces.

 FXP's 10 min chart has a negative divegrence suggesting a pullback as well and giving multiple asset and timeframe confirmation.

 The 5 min FXP is a better timing signal and it's negative right here where we expect the post Q3 bounce to start to be put together, which makes sense as this is a 2x short on the China 25.

And FXI's short term 3 min chart has a positive divgerence, again confirmation.

As well as FXP's 2 min negative

Overall, I think FXP remains a longer term long, as this hourly chart shows, but in the mean time I expect a pullback and will be closing FXP for the time being to protect those gains until the pullback is over / market bounce over.