Posted on 11/20/2007 10:19:20 PM PST by Professional
ping
ping
Also see:
Buffett, Greenspan Concern May Spell End of China Finance Rally
These kinds of charts need to be taken with a carton of salt; I saw similar ones bandied around decades ago which supposedly likened the then-current stock market trend to the run up to the Great Depression.
American consumers cutting back on spending could put a big dent in that graph. But predicting when a bubble will end is sure a lot harder than spotting one.
meaningless comparisons
That decades-old comparison might yet come true, however.
We’ll see...
The final up leg on both, very similar. And much like NASDAQ, the Chinese are now desperate to throw water on the boom. Don’t fight the fed? What can double in value in just months, can it not go down in months, say 50%? And the down of 50% really hurts, triggers all sorts of other stuff.
Not too long from here, we’re going to read lots about folks/businesses that cannot pay back these Chinese loans. That will hurt business, r/e, stock market there, and if coupled with a rising currency, you’ll see a pretty severe contraction in their economy.
Or I could be wrong, and the Chinese market, for the next 20 years, will double every 9 months...
How is it meaningless? Charts, and I’m not a chartist, do at least tell the psychology of a market. These both are charts of euphoria, exuberance, and are not tied to econ fundamentals.
The volume graph sure is different!!!
I don’t know what’s meaningless about it — a topping pattern is a topping pattern. It is not a random pattern with no predictive ability. Can it break out of the topping pattern upwards? Yes, it can, but to follow the pattern of other popping bubbles is a preety sure bet.
Good article, thanks.
Because unlike the U.S. China does not have a free market economy. They’re still a communist country. The market forces are different and their government’s solutions to a crisis are different.
Had there been any merit, it would have happened about 1990.
fxi is a us ETF that tracks the chinese index. So the volume comparison is out the window.
Sorry about the spelling late this evening.
Also, the increasing volume on the downside is ominous.
I worked at the firm that shall not be named in the early 90’s. They had a very good strategist at the time, forget his name. He said, in 1995, the US market was tracking like the Japanese market did in the 80s. He said we should be bullish, and that it would last for a good while. He was right. That guy was the only honest person at the firm though...
But you have to consider that the etf probably mirrors the internal speculation to a large degree. One should also look at the Shanghai volume, to be sure.
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