Once again, the Chinese Equity market seems to be leading the ongoing correction in global equity markets.
The Chinese Equity market topped out in July 2009.
The S&P 500 hit its 'bear market' rally / recovery highs in April 2010 !
Markets have been as volatile as ever, and fundamentals have shown no significant improvement.
We are moving from an individual & corporate debt crisis to a sovereign debt crisis.
The so called '' sub prime '' sovereign debt of countries like the PIIGS is already starting to stress out global bond markets.
How will the already weakened PIIG nations cope with the austerity measures, and still continue to support the global economic recovery?
Meanwhile, the Chinese government has been tightening liquidity as it tries to cool down a bubbling real estate market in urban China.This could mean tougher business conditions in the industrial metals and ores sector if the Chinese economy starts to slow down.
The rally is clearly getting rather long in the tooth, and may be running out of fuel!!!!