China 25 Stock Index Breakout

The China 25 Index Shifts to Overdrive

With so many eyes focused on the runaway US Stock Market, most have ignored that the Chinese Stock Market (as represented by the China 25 Index; stock symbol FXI) has shifted out of neutral and into overdrive with Friday’s close.

The accompanying chart shows the last time that such a trigger (using the Excalibur Method of analysis) was given and what followed.

China25

A new up-trending momentum trigger has been generated for FXI and, is shown by the green horizontal bar at the right top of the chart above.

This would coincide with a money flow shift to Asia. As to where this money flow is coming from, there are enough crises in the West to provide an ample set of clues. But, if I were to take a best guess, I’d say that money is being taken out of treasury bonds and is being repatriated back to China.

If so, then, there will be a tremendous upside potential for the Chinese Stock Market (as well as other investments such as China Real Estate; which, perhaps not so coincidentally is also strongly trending upwards). – George