Shares of the Market Vectors Egypt ETF (EGPT) are off 7.3 percent on volume that surpassed the daily average less than three hours into Monday's trading session. Egyptian President Mohammed Morsi granted himself wide-ranging legislative powers. Over the weekend, Egyptian stocks plunged 10 percent, representing the worst-one day decline for the country's equities since the Arab Spring of 2011.

Critics view the Morsi power grab as a threat to democracy in the North African nation. Earlier this year, Morsi became Egypt's first democratically-elected president. Morsi has essentially grabbed control of Egypt's court system, saying in the process that rulings by the nation's judges cannot supersede his own power.

Supporters assert Morsi made the move because Egyptian courts are littered with appointees of former President Hosni Mubarak and that those judges are hampering Egypt's move to democracy. Some outsiders, and Egyptians as well, fear Morsi's control over the country's judicial branch could hasten a move to a more conservative religious state such what is seen in Iran.

As for the Market Vectors Egypt ETF, the headlines continue a spate of recent trouble for the ETF. Prior to this past weekend, the previous weekend saw Egyptian equities suffer their worst performance in four months. That decline came amid another conflict between Israel and Hamas, indicating regional drama was finally catching up to EGPT, something that had no affected the ETF earlier this year. For example, the ETF actually surged on September 11 when protesters stormed the U.S. embassy in Cairo.

Morsi's judicial power grab jibes with comments he made in early October when he said the government is looking to recoup money from unidentified firms. Amid a widening deficit and depleted foreign reserves, Morsi's gambit to press Egyptian companies for more money is seen as affecting some Egypt constituents such as Orascom Construction and real estate firm Talaat Moustafa.

Further interference by the Morsi administration could impact foreign direct investment and plague Egypt's domestically-focused economy, one that is already suffering from rampant poverty and high unemployment.

After spending much of 2012 being one of the best-performing country-specific ETFs, EGPT has finally proven vulnerable to domestic and regional woes. In the past month, the ETF has plunged 14.3 percent. Just over two months ago, the fund had over $61 million in assets under management. A week ago, that number had fallen to $56.1 million. At the start of trading today, the number was down to $46.1 million, according to Market Vectors data.

Today's drop has taken EGPT below its 200-day moving average. That is a bearish sign and by the looks of EGPT's chart, next support may be the August lows around $12.

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