7/7/2015
By Charles Payne, CEO & Principal Analyst

The Chinese government has taken a hands on approach to either engineering a soft landing to the stock market or propping it long enough to bring in even greater fools.

Last year, the Shanghai Composite was 2059, then it broke out through 2500 near the end of 2014, finally it took off for a triple digital gain as millions of individuals joined the market each month. It’s not unusual to see a 50% retracement of such moves and that would bring the index to 3619. However, July 6's low was 3653!

Things have gotten even more confusing as the Shanghai market took another 1.2% hit early in the week, as it was driven lower by state-owned banks and oil companies. 1,600 stocks hit the 10% daily down limit and $1.4 trillion in stocks have halted trading.

Is this finally the Chinese comeuppance so many have predicted for years or just growing pains that are unavoidable in any economic system? It remains to be seen.

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Charles Payne
Wall Street Strategies

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