The day for bear market is coming?

The day for bear market is coming?
Nov 26, 2007 03:08
YVONNE Points: Join Date: Nov 29, 2004 Status: offline	On November 22nd, Chinese stocks dropped drastically. Shanghai Stock Exchange and Shenzhen Stock Exchange went down 4.4 percent and 4.6 percent separately. The Shanghai Composite Index closed at 4984.16 which was below 5000 points since late August. Today, Shanghai Composite Index closed at 4958.85, dropping 1.46 percent. Shenzhen Composite Index also went down 0.99 percent. The data shows that the bubble in Chinese stock market is gradually becoming small. Till Oct. 16, shares in Shanghai Stock Exchange had been increasing rapidly while shares in global markets had dropped seriously. On Oct.16, Shanghai Composite Index reached 6092.06 points---its record in history. The drastic drop in recent days suggests that Shanghai Composite Index has declined about 18 percent. Usually, if shares fall 20 percent in a year, it means that bear market comes. Juding by this standard, Shanghai Stock market nearly goes into its bear market. What do you think? The day for bear market is really coming or Chinese shares will bounce back very soon?

Nov 26, 2007 03:08

YVONNE
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Join Date: Nov 29, 2004
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On November 22nd, Chinese stocks dropped drastically. Shanghai Stock Exchange and Shenzhen Stock Exchange went down 4.4 percent and 4.6 percent separately. The Shanghai Composite Index closed at 4984.16 which was below 5000 points since late August. Today, Shanghai Composite Index closed at 4958.85, dropping 1.46 percent. Shenzhen Composite Index also went down 0.99 percent.

The data shows that the bubble in Chinese stock market is gradually becoming small. Till Oct. 16, shares in Shanghai Stock Exchange had been increasing rapidly while shares in global markets had dropped seriously. On Oct.16, Shanghai Composite Index reached 6092.06 points---its record in history. The drastic drop in recent days suggests that Shanghai Composite Index has declined about 18 percent. Usually, if shares fall 20 percent in a year, it means that bear market comes. Juding by this standard, Shanghai Stock market nearly goes into its bear market.

What do you think? The day for bear market is really coming or Chinese shares will bounce back very soon?

Nov 26, 2007 12:53	#1
GRIZ326 Points: Join Date: Jun 12, 2006 Status: Offline	My father invested heavily in the US stock market. He always told me that you have to believe in your nation's economy because if you do not trust it you have no chance of acquiring wealth. I think the same applies to the Chinese stock market.

Nov 27, 2007 01:39

DREAMLIFE
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Join Date: Sep 5, 2007
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Quote: My father invested heavily in the US stock market. He always told me that you have to believe in your nation's economy because if you do not trust it you have no chance of acquiring wealth.

Griz, it seems that the subprime crisis has greatly hurt US's economy. Dollar has been declining for a while, and the stock market and the property market also have gone its downturn. Many investors have transferred their invesment to other countries, such as China and India since they are afraid that US's economy really goes into recession. In this situation, do you still trust the market? Sometimes, we need to be cautious.

Nov 27, 2007 11:16

APAULT
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Join Date: Mar 11, 2006
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I don't think the subprime issue has greatly hurt the US. It is a symptom of some of the problems that the US has, but it will not have too great an impact on the real economic activity.

The US economy has some problems but it is still nowhere near a recession. Furthermore, the rest of the world is healthy and will provide the impetus to keep going. On that basis I do not see a bear market in the near future. We are experiencing a 'correction' where some investors will consolidate some of their gains. The Chinese economy is still growing at 11% a year and will continue at or near that rate for some time. So part of what appears to be a bubble is in fact reasonable expectations of profit in the future.

Inflation is the one concern internationally. So far governments have taken appropriate measures to limit it but these do reduce production so we should expect some slowing of economies. If you are a true investor I don't think you should be too concerned at this time, if you are a short term investor (effectively a gambler) then you might choose to avoid the risk of a bit more correction, but no way is a real bear market developing (yet!!).

Nov 28, 2007 04:12	#4
COOLZ Points: Join Date: Nov 28, 2007 Status: Offline	I think things could still go much worse for the US economy, the OPEC nations is deciding whether or not to depeg their currency with the US dollar because the US dollar has depreciated a lot.

Dec 8, 2007 11:00

APAULT
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Coolz: As I understand it, you are saying that the US Dollar will probably fall further. I see, but isn't that the same country that is complaining that China's currency is too weak and it is unfair? So won't the USA be getting an advantage? And isn't that what should happen, market forces and all that? So then the ailing US economy might find its feet again (If someone in a high office doesn't start another stupid war).

Dec 12, 2007 19:50

JIMMYB
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Join Date: Feb 7, 2007
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Yes, Paul. The dollar depreciation is not good for other nations in the world. However, US can gain some benefits from it. That is why US bears the depreciation of dollar. In earlier times, some economists said that interest cuts could escalate dollar depreciation. However, US still takes measures to cut the interest rate. On Tuesday, the Fed announced that it would cut the interest rates 25 base points to 4.25%.It is the third time that US has cut its interest rates.

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