Chinese Stock Market Leads Commodities → Washingtons Blog
Chinese Stock Market Leads Commodities - Washingtons Blog

Saturday, June 5, 2010

Chinese Stock Market Leads Commodities

David Rosenberg points out in his newest newsletter than the Chinese stock market leads commodities:

Indeed, as the chart below shows, the Chinese stock market leads the CRB index with an 85% correlation and by 86 days (call it three months). China is a global demand play on the resource sector and the near 30% slide in equity values likely does portend a pullback in basic materials over the intermediate term. Recall that that the Chinese stock market peaked 36 days before the CRB did back in 2008 and it led the upturn in 2009 by 24 days. The lags are a bit longer on the oil price (97 days) but the story is the same.

[Click here for full chart]

Does that mean that you can make money by playing commodities based upon what the Chinese stock market is doing?

Yes, if the relationship holds ...

I am not an investment advisor and this should not be taken as investment advice.


No comments:

Post a Comment

→ Thank you for contributing to the conversation by commenting. We try to read all of the comments (but don't always have the time).

→ If you write a long comment, please use paragraph breaks. Otherwise, no one will read it. Many people still won't read it, so shorter is usually better (but it's your choice).

→ The following types of comments will be deleted if we happen to see them:

-- Comments that criticize any class of people as a whole, especially when based on an attribute they don't have control over

-- Comments that explicitly call for violence

→ Because we do not read all of the comments, I am not responsible for any unlawful or distasteful comments.