James

What Caused The Latest Chinese Correction?

There is always a catalayst and until a genuine catalyst comes to the chinese market t will carr on going up.
I can not buy at these nose bleed valuations and wish someone would come and take this market down again.
The main reason why the government has not taken the market lower with its comments is because they are waitintg until all their friends have IPO'd off lots of stock in new issues.

You see most (i say most) care more about their friends (and by association themselves) making money than causing a stockmarket bubble.
Do not for one second think that the biggest gainers from this rally are not government officials.

So anyway when their motivation for the rally recedes then we will see some sort of correction, It may not be as big as everyone expects.
Especially if earnings are strong, thus adjusting PE ratios to better levels. Also what strikes me is that in a capitualtion at a top - there is almost always panic buying. Actually I think it will be the foreign institutions that buy the top - not our ayii or village farmer. Foreigners have pulled quite a bit of money out - when they see the market rising in this next leg of an upmove (if things continue of course) then they will start buying again.

The market wont hit 5000 - the government would not allow that. However my guess is that it will get near. 4900.
If I was a gmabler (which I wish I was) Id be long oil stocks in the index and banks and consumer stocks.

anyway we'll see......