I thought I had put this week’s column to bed when I received another note from Market Securities’ Paul Day that is worth sharing.
Day once again gives a warning to China bulls and, although the comparison of the Shanghai composite to the Saudi stock market is questionable, the graph he supplies does make you stop and think.
Day concludes his note: “I have run the two indexes together with a 600 day lag (600 day offset) and China looks to be in the zone of the late 2008 fall for the Saudi market. If the charts were to continue in tandem, it would suggest a fall of 52.5% in the SHCOMP from its April 15th 2010 high close of 3164. This suggests a move south of 1500....a fall of around 76% from its all time high.”
