Tuesday, March 20, 2012

Charting SPX, Chinese Stocks, Copper, & Miners

China was the main focus of today's trading. Late last night newswires were flashing BHP Billiton's negative comments about "flattening iron ore demand in China". Shanghai Comp along with AUD dove quickly. I am not surprised. As Chinese ghost cities have gone unfilled for years, it is beyond any reason for govt to continue playing their game of deception. There is less need for new factories there as well, as the global economy has slowed tremendously and demand for Chinese-made products has waned.

So I put a few charts together. First is FXI over FCX, BHP, and JJC. And the second is one-year outperformance (and a huge divergence) of SPX vs Shanghai Comp (XLY00) and Copper Futures (HGK12). FXI and the miners are breaking down below their wedges, and Dr. Copper should follow.
This development may affect SPX negatively, as yet another of so many divergences has to be resolved soon.

click on charts to enlarge

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