IS CHINA DISPLAYING CLASSIC POST BUBBLE PRICE ACTION?
5 November 2009 by TPC
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After the spectacular mean reversion of the last 6 months the near-term top in the Shanghai appears to be classic post-bubble price action. Are we staring at years of sideways to down action?
The history of bubbles would lead you to believe so:
Rapid growth might not turn things around either. There doesn’t seem to be much of a correlation only the short to medium term. The SSE hit a high around 2,200 in mid-2001 and then was in a bear market until mid 2005 declining more than 50% to around 1,000. That happened during a period of very rapid economic expansion in China.