Chinese Stocks Just Started Their New Downtrend!

By Sean Hyman

A lot has been said about the Chinese growth story. In fact, its huge growth has been partially credited for keeping the global recession from getting any worse than it did.

Also, Australia’s GDP never went into negative territory during the global recession so they never entered that recession. A lot of the reason they never entered the recession was due to the demand from China.

Well, lately China has been trying to put the brakes on their economy by raising the reserve requirements on their banks which forces them to be able to lend much less than if those levels had not been raised.

China has also made other adjustments within their real estate market etc. to try to slow down the economy and keep it from overheating. They are particularly worried about a “housing bubble” that could be going on over there. But of course, those aren’t too bad are they? Ah, just ask Americans how bad it can get when those pop.

Okay…so are they succeeding in slowing down their economy? Their stock market seems to think so. Check out the chart of the Shanghai Composite Index below. It just broke south out of a HUGE triangle pattern. This index is now likely to shed 1,000 points in the months ahead!

The Chinese Stock Market is about to shed AT LEAST 1,000 Points!

So if you have Chinese ETFs, etc. be sure to keep an eye on them! Also, see if the sell-off in that market spills over into other financial markets.

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