China is Not a Bargain Compared to the US

Pundits and Television talking heads are starting to talk about China as a value play for investments. Well back in July in China is Still Worse Than the US, and that is Not a Good Thing I noted that relative to the S&P 500 ($SPY), the Shanghai Composite ($SSEC) still had a lot of room to run lower. The updated ratio chart below shows that the nearly 4 year long descending channel was broken to the downside 2 weeks ago. And below that channel and the 76.4% Fibonacci retracement of the major move higher, there are only two spots of support left before a full retracement. The Relative Strength Index (RSI) is bearish and holding near the 30 level, technically oversold but just in a minor way. And the Moving Average Convergence Divergence indicator

(MACD) is negative, also supporting further downward movement. Maybe the valuations on the Shanghai Composite are low, or even a steal, but that does not mean that they cannot go even lower. It also does not mean that the opportunities there will outperform those in the US. This chart suggest that you keep your money at home.

Dragonfly Capital Views Anniversary Celebration

For a limited time the Opportunity to join the Dragonfly Capital Views Premium Membership on an Annual basis is available for only $600.

This is 20% off of the standard annual subscription price and nearly 45% off of a rolling monthly membership! Don’t miss this limited opportunity! Sign up here.

Want to learn more about Dragonfly Capital Views?

Dragonfly Capital Views Performance Through September 2012 Expiry

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog