- Posted by Greg Harmon on July 30th, 2014 at 8:04 am
The Chinese market has been gaining attention lately. The Shanghai Composite broke a range and has been rocketing higher the past week, but the China ETF, $FXI, has been running hot since early May. And what about the S&P 500? It has periodically made new higher highs but over the past month is moving slowly and drifting higher. Many think a correction is coming soon. Maybe it will maybe it wont.
But with a big shift in China and leveling at least in the US one tend has not changed at all for 5 years. The Ratio of the Chinese Market to the S&P 500 has been in a downtrend since July 2009. Think about how much has happened over that time frame. Wars, ethnic uprisings, currency crises, default threats. At least 2 or each! and look at the ratio chart below. It just keeps going lower. Flows from China to the US. Yes it is in an upswing at the moment, but it has a lot of room before it challenges the top of the falling channel.
Fibonacci aficionados will notice that the channel has retraced 88.6% of the move higher. So a reversal could come. But many would expect a continuation towards a full retracement. Harmonic traders will see a Bullish Butterfly playing out. But that pattern looks for a continuation lower to the bottom of the triangle before reversing.
You don’t have to believe in Fibonacci’s or Harmonics. But you cannot ignore that the trend lower, from China to the US, remains unchallenged. Until that changes there is really no reason for you to look to move assets out of the US to bet on a Chinese Market recovery.
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Greenbrier, The One That Got Away….Or Maybe Not
Posted by Greg Harmon on July 29th, 2014 at 3:13 pm
I started following Greeenbrier, $GBX, in October as A Hidden Transportation Play. Since then it has had an incredible run higher, up over 250%. The […]
Preparing For A Gusher Or A Flood
Posted by Greg Harmon on July 29th, 2014 at 7:54 am
Crude Oil comes in two varieties, West Texas Intermediate and Brent. Here we mainly use WTI so you do not hear a lot about Brent. […]
Conagra Foods, Butterflies and the Bollinger Band Squeeze
Posted by Greg Harmon on July 28th, 2014 at 3:52 pm
Conagra Foods, $CAG, has had a rough year. Who would have though a food stock with 3.5% dividend yield could gyrate so much. But it […]
Benzinga Pre-Market Talk
Posted by Greg Harmon on July 28th, 2014 at 12:09 pm
Friday I spoke with the Benzinga crew about round numbers, Call Spread Risk Reversals, the Russell 2000 and my book and process. Its a YouTube video, but you can listen while watching other stuff.
Top Trade Ideas for the Week of July 28, 2014: Bonus Idea
Posted by Greg Harmon on July 28th, 2014 at 8:01 am
Top Trade Ideas for the Week of July 28, 2014: The Rest
Posted by Greg Harmon on July 27th, 2014 at 3:28 pm
SPY Trends and Influencers July 26, 2014
Posted by Greg Harmon on July 26th, 2014 at 9:02 am
A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes. Last week’s review of the macro market indicators […]
Cleveland’s Best Linkfest!
Posted by Greg Harmon on July 26th, 2014 at 8:36 am
Goodyear’s Airship, Odd thing on Money, On/Off button for credit cards, The Burlesque Festival, and Burning Rivers all in one place
Emerging Markets Are Just Getting Interesting
Posted by Greg Harmon on July 25th, 2014 at 7:44 am
There has been a lot of hype over the last 6 months about the run up in Emerging Markets, to which I say ‘meh’. Yes […]
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- China, The S&P 500, and the Unbroken Road
- Greenbrier, The One That Got Away….Or Maybe Not
- Premium Earnings 7-29-14
- Preparing For A Gusher Or A Flood
- Conagra Foods, Butterflies and the Bollinger Band Squeeze
- Benzinga Pre-Market Talk
- Premium Earnings 7-28-14
- Top Trade Ideas for the Week of July 28, 2014: Bonus Idea
- Top Trade Ideas for the Week of July 28, 2014: The Rest
- Top Trade Ideas for the Week of July 28, 2014: The Rest Premium