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Forget Europe – Even China Showing Breakdown

With these signs, expect a market peak soon

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On the other hand, while the bond market traded lower last week, if we look at the 10 year U.S. Treasury Notes futures contract on a multiyear chart we clearly see this longer-term trend of higher bond prices still intact.  Higher bond prices as it relates to the ‘still’ high quality U.S. government bonds indicates risk aversion on the part of global investors and as such not a great deal of optimism for global growth.  As bond markets tend to lead the stock market it is worth keeping a close eye on them.

10 year treasury notes futures

And thirdly, yesterday I showed the chart of the blue chip stock index in Spain, the IBEX 35, which looked rather precarious to head lower.  On that same theme, please note a similar pattern in the Chinese stock market as measured by the Morgan Stanley China A Share Fund (NYSE: CAF).

shanghai composite etf

For all the great talk of the global growth engine that China is and will be, there are plenty of issues to there too to point fingers at and the chart shows at least some potential of a breakdown.  I will be keeping a close eye on these charts as the still massive global economic issues further unfold in coming months.

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.

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