By Chris Becker
The normal dynamics of bear market activity are now playing out. Enormous rebounds in stock prices that get once despairing investors excited and hopeful that all is well then translate into dead cat bounces. Yesterday, only the most delusional – i.e Australian punters – took the Kool Aid and pushed their bourse higher in Asia, while Europe lifted as China cut its interest rate, giving US traders a temporary reason to lift the Dow off the mat. But later in the session as the euphoria lifted and more sober analysis prevailed, US stocks fell and dragged down futures for all other risk markets, including bonds.
Recapping Asia first, the bath of blood is overflowing in China with the Shanghai Composite continuing its collapse, falling over 7% yesterday to close below key support at 3000 points. The target from here is the next level at 2200, evaporating all the gains of the bubble:
