The U.S. vs. China currency clash is coming to an end. The investor consensus
is that the yuan could appreciate by 5% by the end of this year.
What's at stake?
Exports for the U.S. at a time when we need more jobs. But the opposite would
hold true for China .. a decrease in their exports which would translate to
a slow down in their GDP.
Most economist would say that it won't hurt them, or that they need to slow
down or face inflation. (China's GDP rose to 11.9% from the same period a year
ago ... this was the fastest expansion rate in nearly 3 years.)
It won't hurt China?
That is not what their stock market chart is saying. Today, we posted
a long term view of the Shanghai Composite Index and it showed a scary picture
last night with a 4.79% drop.
It wasn't last night's drop that was scary ... it was the breakdown in
the index's triangular pattern.
The downside projection for this pattern is about 30%. So their stock market
is saying that something is terribly wrong. Part of it may be the yuan
vs. the Dollar, but something else is more likely to be the culprit. We don't
know what it is yet, but it should become apparent fairly soon.
Marty Chenard is an Advanced Stock Market Technical Analyst that has developed
his own proprietary analytical tools and stock market models. As a result,
he was out of the market two weeks before the 1987 Crash in the most recent
Bear Market he faxed his Members in March 2000 telling them all to SELL. He
is an advanced technical analyst and not an investment advisor, nor a securities
broker.
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