“Is China a bellwether: How important are bearish signals of this country for the markets?
My trading system is telling me that the long term trend is bullish (weekly one) but we have some short term bearish signs (daily ones). The couple USD/CAD confirms that as well as the industrial metals trend. However, China is one of the few indices of my system which shows a long term bearish signal. FXP, the inverse ETF of FXI, draws a perfect bullish MACD divergence and the Shangaï index show bearish signs on the long term and the short term. Without these signals, I would have been pretty bullish on the markets. However, China weights more and more in the worldwide trend.
In addition to the charts, I found an interesting article which sums up the situation in the BRIC from William Gamble in Seeking Alpha:
Didier,
ReplyDeleteThanks for your analysis of China. I, too, am very interested in China and the emerging markets. I'll follow with interest.
Grant
Hi Dider,
ReplyDeleteI don't want to put my foot in my mouth...since your analysis has been timely in the past...but I am having a hard time seeing accute bearishness in the weekly FXI...granted it looks like it is overbought here and is due for some rest but I am not confident of a retesting of the recent low at ~23ish...
Just my take- Kinda funny since I am the MEGA BEAR! DOW ~4000ish type...If the DOW is ever going to go that low the world is sure to follow or tag along...I get this way because I think it is just an inevitable end to the chart situation...Until proven WRONG! :) Which is always a likelyhood...I always reserve the right to be wrong and then change my OUTLOOK (hopefully quickly).
What would be an opinion without a chart so here is what I think the charts are saying:
http://i254.photobucket.com/albums/hh81/etfremd/FXIWeekly4_23.jpg
Good Trading,
Eric