It appears that the effect of the stimulus package that China had injected into her economy is waning off since mid to late April 2010. Since then, the stock market has been going through correction. The SSE has re-trace 61.8% of the run up from Nov 2008 low to Aug 2009 high. The rally from Nov 2008 to Aug 2009, we saw a 100% increase in the index.
By now, it has given up almost 2/3 of its gains. This is probably the most bearish index compared to Dow, S&P, Nasdaq, FTSE, Nikkei etc. So, how much faith do you want to put into the China growth story?
Dow has given up only about 30% of the gains from Mar 2009 low to Apr 2010 high. Does that mean that there are more to lose for Dow? When would the effect of stimulus package start waning? Will it give up another 30% of the gains few weeks down the road? What will US & Europe do to prop up the market?
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