Since the last posting in 14 December 2010, Dow has marched ahead added 800 points (7%). Dow has defying strongly against a double top in making when an shooting star appeared on 7 Dec 2010. now what is the market telling us? QE2 is effective? Market is confidence is building up? well i m not convinced.
From Shanghai and Hang Seng perspective, decoupling theory is in played. These markets have moved up a little since Dec 14 and now back to original state as opposed to Dow has advanced 7%. China has been tightening its economic policy with economy overheating in mind. Headline inflation is point up. It is interesting to see that Shanghai completing its symmetrical triangle soon, probably signaling no further tightening in near further future.
Take a closer look at BDI which measure the international shipment activities has just bottom recently. Any significant recovery in BDI may provide an indication that China economy will pick-up again.I am sure the Big Picture remain unchanged that the global growth will be from Asia in coming years. China being the economic locomotive in Asia, any positive movement in Shanghai, will spill over to other ASEAN economy. So put on your seat belt, sit tight as Shanghai is setting to take off.
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