Parabolic rises can be fun if you are aboard, but it does not generally end well.
China has gone parabolic. Check out the FXI today, which I should be long. It was up NINE (9) percent TODAY. This is after being up 100 percent just this year. This is a country index, not just one business. LFC (China Life Insurance) was up 11 percent today.
Don’t think China is immune from a crash. With oil now at $86, the Saudi Arabian stock market has still managed to crash over 70 percent.
Tonight I got the most telling evidence of all about the parabolic move that’s underway in China…an email from my pal Eric at Blackstar:
Getting scale out trades in many China related stocks. The party is getting old, but still could go more parabolic, of course.
Even trend following systems are ‘locking in’ gains. That does not happen too often.
Don’t be a hog!
Disclosure – Long Baidu and SINA