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IS THIS THE BEGINNING OF A NEW BEAR MARKET IN CHINA?

The most basic definition of a bull or bear market is the market’s position when compared to the 200 day moving average.  Most chartists consider a market above the 200 day moving average to be in a bull market and a market below the 200 day moving average to be in a bear market.  China’s Shanghai Index recently broke below the 200 day and appears to be following classic post bubble price action – a bursting bubble followed by a relief rally based on false hope which is ultimately followed by years of sideways or negative market action (think Japan circa 1995 or Nasdaq circa 2005).  Without getting too technical and simply using this very basic definition the Shanghai index has now officially entered bear market territory.

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