IFN

India (IFN) and China (CHN)

Hamilton

A year and a half ago we posted this blog;

india and China feb 2011

The question then was how can the World stock markets keep going up if China, the second largest economy is going down, with Japan , the third largest, still down about 75%. Here are the updated charts;

ifn sep 2012chn sep 2012

Clearly both indices are fallowing the anticipated path quite well, having dropped another , give or take , 20 percent over the last year and a half. For those that prefer the pure Shanghai composite index things are actually worse;

Shanghai Composite Index,

Not unlike the Nikkei, this one is down about 67% and moving lower. Clearly of the 16 years on display here the “anomaly” to use a mining phrase, occurred in 2007 with the index climbing more than sixfold. To hope that China is the one country that will pull us out of our present low-growth era is a leap of faith at best.

IFN, India and CHN, China update

Hamilton

First the old blog from Febr. 10, 2011, 17 months ago;

india and China feb 2011

And here today’s charts;

ifn jul 2012chn jul 2012

The little red arrows show where and when these ETFs were on Febr. 2011. Both were at about $30 at the time, so now , a year + later they are down to roughly $20 which is about 30%. Both are probable in a wave 4 of a five wave sequence for wave C. We do not now how low they will ultimately go, but they should , at least , go below the ‘09 lows. IFN comes from $70 and CHN from $55 so both are down by more than 50%. Using the FXI as an alternative ETF (iShare) for China we get pretty well the same picture;Same with Shanghai DJSH

fxi jul 2012shanghai jul 2012

The FXI is down about 60% from the highs. It should, as a minimum, trade below $28 after which it will probable make new post peak lows. Shanghai has done very little over the past year but the EW count is analogous to the others. If China and India are making “soft” landings, investors in these indices probably do not agree.

India (IFN) and China (CHN).

Hamilton

India IFN China CHN

Here are India represented by IFN and China by CHN. Not the best funds but they will do. Both went into bubbles 5 to 70 and 5 to 53. Both crashed but we know from experience that bubbles nearly always, or perhaps even always, correct to levels below their respective starting points, which has not happened yet and therefore should happen. Both counter-trends since the recent lows are very clear B-waves. One may not be finished yet but that is simple a matter of timing. So if these two appear so shaky what would happen to the rest?