Chinese Stock Bubble Deflating


Beyond the emotion and removed from the hype, let’s determine the real state of the Chinese Stock Market.

Here we’ll use the US etf (exchange traded fund) with the symbol FXI to examine the state of the China 25 Index.


Click Chart to Enlarge

Here’s the stock index chart as analyzed by the Excalibur Method.

Excalibur is excellent at determining shifts in market momentum, and, in the case of this market, has found a breakdown in continued upward price momentum (see the chart).

The China 25 Stock Index is an important index, but, is it reflective of other areas of the Chinese financial markets?

For that insight, let’s take a look at another larger China-based index chart, the SSE Composite.


Click Chart to Enlarge

The SSE Composite (Shanghai Stock Exchange Composite Index) chart shows a market poised at a weak pivot point.

The slightest shove  downwards at this point and this market will very likely go into a significant price slide downwards.

This will be a monthly trend shift only however at this time.

The quarterly trend continues to remain strongly in place for now unless the FXI were to drop below 40.  – George