Despite all the rescues – rumored and real – headed our way, there seems to be very little respite for the Chinese stock market. While indexes in the U.S. and Europe bounce on these hopes, there is a distinct lack of life in Chinese markets. Considering their substantial exposure to Europe, and the country's role as a catalyst out of the 2009 global economic hole this remains a serious fly in the ointment, even as the country has begun new rounds of fiscal and monetary easing. It is a bit of a head scratcher.
As for the U.S. we saw a nice consolidation day yesterday in markets, but for the most part everyone is waiting to react to 3 days of major headlines: Wed (Fed), Thu (ECB), Fri (Employment). While the market has grinded it's way up from early June, each step of the move has immediately been met with substantial pullbacks of 50-66% of the previous step in quite violent action. Many of the gains of course have come in overnight gap ups based on European "rescues" both at the end of June and last week. Now we shall see if that pattern can be broken.
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog