Buying the Japan ETF Versus Singapore

This chart shows the dfferential between the iShares MSCI Japan Index (AMEX: EWJ) and iShares MSCI Singapore Index (AMEX: EWS) -- Japan minus Singapore. From May into Feb., the Singapore market rocketed (EWS) in relation to the Japanese market (EWJ), which reduced the premium of the EWJ to roughly $2/share from $6. During the past couple of weeks, however, the EWJ has performed better than the EWS, which has lifted the EWJ premium to $3.22 from $2.06. My technical work (and my per- ceptions of the relative fundamentals) argue that the EWJ will continue to outperform the EWS (in either direction), and will expand the premium to $4.25-$4.50 in the upcoming days-- on the way to $6.00 thereafter. It is with this in mind, that I enter an equal dollar spread position, long the EWJ vs. short the EWS... MJP 3/05/07 1:30 PM ET EWJ: 14.28; EWS 11.03 = $3.25