China  -  The Trend.  It almost seems inevitable that our children are going to have to learn to speak  Chinese unless there is a dramatic shift in the major economic trend  - China - The Good , the Bad, and the Ugly.   Its Exchange Traded Fund- Ticker Symbol FXI has been the #1 Investment recommendation of Investors411.

A clear China map with all main large cities, rivers and neighbour countries

China from Google maps

The People’s Republic of China 

For some basic information see

  • Positions section at top of blog (scroll down to FXI) – contains  reasons to invest.
  • Wikipedia will give you a more comprehensive overview

GDP –  China’s GDP numbers have just been published for the last quarter – +6.1% See BBC story. China (@$7 trillion per year GDP) is getting hurt by the worldwide recession. However compare it to the USA 4th quarter GDP -6.3% (@ $14 trillion per year GDP)  

China’s figures are the lowest since they started keeping figures in 1992. They are down 0.7% from the previous quarter, obviously because of the worldwide recession.  The economic trend is also obvious. China’s economy is growing far faster than the USA’s. It may only be a matter of years rather than decades before they become the #1 economy in the world.

Recent Headlines

  • China moves into Latin America – Today’s NYT
  • China moves to become #1 in the electric car – NYT
  • China’s Shopping spree – Time magazine

China has over a $2 trillion dollar surplus compared to USA’s $11 trillion dollar deficit  

Note – all these figures are suspect. China’s even more so than the USA’s.

The Bottom Line – The economic trend is clear. China is economically rising and the USA is sinking. Right now, the economic gap between these two counties is closing at an accelerating rate.. You may not like this trend – but if you have kids or grandkids teach them to speak Chinese.

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

STOCKS


Index Percentage % Volume
Dow +1.38% down
NASDQ +0.07% down
S&P500 +1.14% down
Russell2000 +1.75% -

 

Technicals & Fundamentals

Major US stock markets (and most foreign markets) rose yesterday in decreased below average volume. 

XLF - The ETF that tracks financials (mostly shadow banks) rose +4.83% in decreased, below average volume.  Financials have lead this rally and if they  collapse so will almost all other sectors. The loss in volume (the #1 confirmation factor of a price move) is troubling for the bulls.  This could be the first sign of a correction.

Short Term Outlook - Similar forecast to yesterday – First technical chink in the bulls armor appeared Tuesday.’s big volume sell off. A small gain yesterday in decreased volume is not bullish.  

Too early to make a call, but short term traders should pay attention. The Danger signs to watch for - another big price/volume decline probably led by financials and/or stocks moving lower on no news or good news.

Long Term Outlook = CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! 

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