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Is Now The Time To Buy China?

Published 05/12/2014, 12:07 AM

Below is a look at how Chinese assets are performing. There has been much speculation that China's banking system is in a state of disarray, and its economy may be undergoing a collapse of sorts.

The bar chart shows the Shanghai Index Class A -- owned by mainland Chinese investors -- while Class B, the downward sloping line chart, reflects the performance of Class B shares that are available to foreign investors. The black line near the top shows the performance of USD/CNY (US dollar vs. Chinese yuan).

Shanghai Class A and B Indexes Daily

Clearly, we are seeing all Chinese assets falling. The shares market, however, shows a slight double bottom though, in which the second bottom is a bit higher than the first. Does this suggest a potential near-term bottom that may offer a favorable reward/risk setup for traders?

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