Chinese property prices will start to fall sharply next quarter and the decline will extend into the first half of 2011, a government researcher said in remarks published on Thursday. There where also rumors of deposit rate caps to be lifted. We usualy gauged the strength of the Chinese economy by watching the price of copper and oil. But with the expectations of more Q-Easing from the FED in November, investors have been fleeing into commodities for the past several days and hence, commodities could be a bad indicator for the health of the Chinese economy. It is certainly worth having a look at the technical picture of the Chinese Stock-Market.
SH COMP P&F Chart
SH Composite
On the other hand, we have European & US Indices that keep on challenging important resistance levels. It will be interesting to see how investors behave next week, after Friday's Options & Futures expiry. If too many Investors have locked in gains by writing calls on their positions, it could well be that they will be forced to deliver stocks against short calls. If this is the case, equity markets would be well protected to the downside since investors will give up exposure through the expiry. There could be a real capitulation of the bears ahead, that could push the markets up again in the comming weeks. I would not view this upmove as a long term positive buy signal, but rather some more action of a top building phase.
SMI: remains in break out territory
DAX: heading towards break-out territory
SPY: break-out territory
QQQQ: break-out territory
Latest AAII Investor Sentiment Survey:
The worrisome factor in this market is the steady rise of bullish sentiment, as the market is trading around the obvious resistance levels:
bullish: 50.9 % - up 7
neutral: 24.9 % - up 0.3
bearish: 24.3 % - down 7.4
