Posted on 05/19/2010 6:44:18 AM PDT by bananaman22
Does the Chinese stock market presage the U.S. market's direction? If so, the U.S. market is set for a fall.
The economies of China and the U.S. are in effect Siamese Twins, joined at the hip. By pegging their currency to the U.S. dollar, the Chinese central government has tethered its economy to both U.S. policy and the U.S. economy.
Since the U.S. economy is still considerably larger than China's, and the yuan/renminbi is pegged to the dollar (and not vice versa), then we might expect China's stock market to follow the American market's lead.
As expected, the two markets are clearly correlated, often acting in lockstep (both rising or falling together). But China's markets also seem to act as the canary in the coalmine for the U.S. markets, declining before U.S. markets plummet.
Volatility rules all markets nowadays. China is certainly not exempt. Full article at: US Stocks
(Excerpt) Read more at oilprice.com ...
Canarys are becoming endangered species.
I look around the coal mine - they’re dying...
I believe the next support test is down around 9,000
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