How vulnerable is China?

The Chinese equity market has effectively doubled up from the low of last April (1997) to the Friday high of 4317. With two market rule changes announced, China futures are offering an initial Monday morning fall of 5%. However, it is entirely ironic this only takes the market back to the level of a few days earlier.


China, monthly

China, daily

Summary

Its been another long and tiring week... so this shall be short...

China wants to broaden/allow more stocks to be shortable.
Further, it wants to stop traders using margin to buy OTC stocks.

Frankly, both changes seem reasonable... but clearly, its given some traders the excuse to suggest a short term peak has now occurred.

Personally, regardless of the price action early next week, I'd guess the SSEC will likely continue broadly higher to the giant 5K threshold... certainly by early Autumn.
--

**Bonus chart...

WTIC Oil, weekly2

A powerful net weekly gain of 8.3%, with the second consecutive green candle. Outlook is very bullish into the summer, and I'm guessing there is a high probability Oil will claw into the $67/75 zone.

--
Goodnight from London
-
*the weekend update will be on the US weekly indexes