Monday, May 5, 2014

China's Shanghai Rallies despite a Contraction in Manufacturing

The Purchasers Managers Index (PMI) in China for April fell to 48.1 from 48.3. The survey showed factory activity in the world's 2nd largest economy contracting for a 4th consecutive month, yet the Shanghai shrugged it off.


Monday's late rally was impressive from both a Price and Volume standpoint



Chart forSSE Composite Index (000001.SS)




Shanghai composite since the 1990's reveals the Key 2,000 level of Support


Chart forSSE Composite Index (000001.SS)
Most U.S. money managers are keeping an eye on China. If the Shanghai adds 1% or more on Tuesday than Monday's late rally could signal that the Govt is prepared to act with measures that would quell fears and spark a longer-term move higher in stocks.

Maybe the Year of the Horse will prove to have more bucking power than many bears now estimate.




Thank You,
POTC-
http://psychologyofthecall.blogspot.com

No comments: