China's market down another 5% overnight

China is a canary in the global economy coal mine. The Shanghai Composite bottomed in November 2008, four months before the S&P 500. Most recently it topped out 9 months ago in August 2010 at 3471 and since then has declined about 25%. Technical support lies next in the area of 2400. If it held there that would mark a 35% decline from the peak last August. The breakdown in the Chinese market suggests further downside risk for equities and commodities over the next quarter.

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