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http://www.itv.com/news/2012-03-21/what-can-we-expect-from-budget-day/
The markets are trading lower today after worries on the Chinese economy surfaced once again. A Chinese slowdown has been long talked about but has had little effect on the massive rally in U.S. equities. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $140.00, -0.88 (-0.62%).
What is the reason for this shift in market action? Why does talk of a slowdown in China mean something while the last ten times it had no effect on the markets?
Simply put, human bullish emotion has reached a top. Think of the ocean and the tides coming in and going out. As emotion sways one way, it will ultimately reach its peak and slowly start to shift the other way. This is the motion of emotion. Based on the effect of the China news today, this shift has started.
The slight shift in market mentality can be seen in Apple Inc. (NASDAQ:AAPL). Over the last week, AAPL shares have had a tough time breaking through the $600 level. Today the stock is trading at $597.29, -3.81 (-0.63%).
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So many talking heads in the financial media continue to say that they do not care about the Chinese economy. They continue to pound the table that as long as the U.S. market inflates, who cares about what happens to China. Well, every investor should be concerned about a China slowdown; I'll cover the top three the reasons why.
First, the Chinese economy has led the global stock markets higher since 2008. Traders and investors should know that the Shanghai Index bottomed out in late 2008, meanwhile, the U.S. market indexes did not bottom out until March 2009. The Chinese economy leads the U.S. and the rest of the global markets since that time.
First, the Chinese economy has led the global stock markets higher since 2008. Traders and investors should know that the Shanghai Index bottomed out in late 2008, meanwhile, the U.S. market indexes did not bottom out until March 2009. The Chinese economy leads the U.S. and the rest of the global markets since that time.
The second reason that investors should fear a Chinese slowdown is because many companies are doing a lot of business in that part of the world. Companies such as General Motors Co (NYSE:GM), Yum Brands Inc (NYSE:YUM), Wynn Resorts Ltd (NASDAQ:WYNN), and even the mighty Apple Inc (NASDAQ:AAPL) do a lot of business in China. If the Chinese economy really slows down it will hurt all of these corporate profits in the future. Remember, the stock market cares about the future not the present. Investors can easily see how the base metal stocks such as Freeport McMoRan Copper & Gold Inc (NYSE:FCX), and Rio Tinto plc (NYSE:RIO) have traded recently compared to the major stock indexes in the United States. This is due to a weaker Chinese economy.
The third reason why a Chinese economic slowdown will affect the global stock markets is due to a lack of investment abroad. Just think about it, it was not that long ago that the International Monetary Fund, the European Central Bank (ECB), and the even French leader Nicolas Sarkozy begged China to help with a European bailout. At that time, the leaders of the world acted as if China could bail out the entire Euro-zone. Now, these same leaders act as if China no longer matters to the global economy.
Here is the bottom line, if the Chinese economy significantly slows down it will affect the world. If the Chinese no longer continue to invest abroad the world economy will feel it. What will happen to the United States if the Chinese stop buying U.S. Treasuries? Better yet, what will happen to the United States economy if the Chinese actually begin to sell bonds? The U.S. will have to pay a much higher debt service as yields rise. All eyes should be on China over the next few months as this could be the bigger problem for the global economy.
aapl
60 min data
1% box size used because of this intense uptrend
now,either we get a break to $632 area
or we get a failed signal/black line
if we get a failed signal.......
NOTE WELL....the proximity of the trendline
market will see t5hat as a break of momentum/intense trend
not a short as yet..only a scalp
probably move down to 580 supp area
but aapl is a driver of markets ...so watch index carefully
Read more: http://www.businessinsider.com/10-things-march-19-2012-3#ixzz1pYp4bxHC
