Cabot China-Timer Remains Positive
By Paul Goodwin, Analyst and Editor of Cabot China & Emerging Markets Report
From Cabot China & Emerging Markets Report Update 11/19/09
After being turned back in August, September and October, the Halter USX China Index finally surmounted the 5,500 level on Monday. Breaking through this three-month resistance was important, but equally important was that it gave the Cabot China-Timer a little breathing room. We have no changes to make in the portfolio, although we’re banishing SIHI from our Watch List after it coughed up its entire October gain on big volume.
President Obama’s trip to Asia hasn’t produced any news with much impact on the market. The trade war that has supposedly been developing between China and the U.S. looks to be on hold, at least for now. We’re looking forward to a chance to check the papers on a few new IPOs. Next week’s edition of the Cabot China & Emerging Markets Report will come out after the close on Tuesday, to give you a chance to get your portfolio in order for the Thanksgiving/Black Friday lull. Here’s wishing you a great holiday!
As we noted above, the move of the Halter USX China Index to the 5,600 level gave us both a breakout above resistance and a little distance above its 25- and 50-day moving averages. This has been useful in keeping the Cabot China-Timer positive in spite of the market driven correction in the Index. Our green light is safe, for now.
Markets slipped early in today’s session, then crawled back a bit during the day. It may have been news of the strengthening dollar or a downgrade of the chip sector or weak economic data that did the trick. After a robust rally earlier in the month, such a pullback is hardly unexpected. The Dow dipped 94 points (0.9%), remaining well atop the 10,000 level. The Nasdaq slipped 36 points (1.7%) and the S&P 500 scrubbed off 15 points (1.3%). The Halter USX China Index fell 104 points (1.9%).
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