Good top down view of risk today from technician Cory in this longer-term chart of the Shanghai Composite. More levered loans in Europe are unlikely to turn the tide of the global cyclical downturn any more than QE efforts over the past couple of years in the rest of the world. The prior cycle lows of the Chinese stock market were in November 2008 at 1664 (30% lower from where it is today). The Chinese market has served as a leading indicator for other global stock markets and the commodities sector over the past few years, usually moving 3 to 4 months ahead of the pack. The fact that it is presently showing no signs of a recovery here should not be ignored.
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