china daily, page-46

@ausheds since you raised the issue of Chinese RE firms, has anyone noticed that the charts of these Chinese rare earth producers are leading Lynas by about one month? See here the chart of China Northern Rare Earth (CNRE):

https://finance.google.com/finance?q=SHA:600111

CNRE starts its runup with significant price and volume moves the first week of July. Lynas starts its high-volume runup around July 26th, so Lynas was time delayed.

Now look at the activity of the last two weeks. CNRE is running back down, which seems to be the market forecasting easing of the commodity price in advance of its happening.

Is Lynas going to continue to follow the lead of the Chinese stocks, or is Lynas somehow different?

Regardless of the fundamentals, it is very interesting that the ASX and Chinese markets did not mirror each other for peer group stocks. In effect the Chinese liquidity wall separating Western firms from heavy participation inside of China has created two really different groups of investors, each voting on separate theories about market direction. This is in contrast to western markets, where if you take an index for a market group, it almost always mirrors the chart behavior of most of the stocks that comprise the index. Hedge funds and mutual funds constantly rebalance in a way that makes these stocks follow a similar pattern. That copy cat behavior is not possible here, so CNRE and Lynas have charts that each act out theories of a different group of investors.