Chinese stocks are under downside......>

CHINA STOCKS: Chinese stocks are under downside pressure today with the failure

of the CSI 300 to break above resistance at 3400 earlier this week giving way to

weakness. The downtrend in play since mid-June remains intact below 3400,

keeping the medium-term focus lower. 

- The HSI is also under pressure but is faring slightly better but is still

failing to post a higher high for the cycle, keeping the bearish trend intact. 

- While mainland stocks have often decoupled from global trends in the past, the

divergence in performance between Hang Kong stocks and the MSCI world is

staggering. The 100-day rolling correlation between the HSCI and the MSCI World

is now at 25-year low at -0.4, after being being above 0.9 earlier this year.

This highlights the extent to which markets are anticipating the US and Chinese

economies to decouple.