Crude oil has broken through the $80 mark once again – trading as high as $82 – before settling back in after hours trading due to “concerns about the US economic recovery.” Not even joking about that one.
Crude’s on the loose!
Meanwhile the Chinese equity markets – the poster child of the global economic recovery – continue to languish, unable to decide if they have the energy to break through to new highs, or merely are destined to break down once again:
China’s rolling? Not so fast, my friend!
(Source: Yahoo Finance)
A few weeks ago, I pointed out these charts as major non-confirmations of the US indices recent highs. Though crude has broken through, I’m going to stick with the hypothesis as long as China languishes.
After thinking about it – crude rallied well into the summer of 2008, while the equity markets were breaking down. Crude was a lagging indicator then, so it’s possible that it’ll be the last to roll over this time around.
China, though, was among the first to roll over last time. And it looks like it may be doing the same once again.
If China is turning down, look out below – it could be a long way down.