The one thing you should remember about China is that they are not 'team' players.
This cheery little article caught my attention today...(bad news for Australia)
The carry trade has begun to unwind; ominously, as the week closed, with greater speed and greater collateral damage.
ANTI-Prediction # 5: China will be a BANE, rather than a boon, to the markets.
Before the dollar started doing a greater share of the damage to stocks and commodities, they were already in trouble due to rumblings from China. That country -- in order to keep things from getting too far out of hand inflation-wise--is taking incrementally bolder steps to slow things down to a simmer from a rapid boil.
This is good for them; but bad for the markets. The latter, you see, have bid up all manner of prices on the crazy notion that a nation accounting for less than one-tenth of world GDP was able to carry everyone else (as well as speculators' bloated portfolios) on their backs.
They neither want nor need that job.
In fact, as I have been warning for months, China will be doing its best in the months ahead to bolster its own "portfolio." To do so most effectively, they will need a higher U.S. dollar and lower commodity prices.
Markets may bounce from their oversold positions; maybe as early as this week (unless the dollar's rally REALLY gets going, and everything else just goes down in a straight line.) But the lesson from our look at OUR "January barometer" is this: All the factors that caused stocks to swoon recently will, if anything, intensify in the weeks and months ahead.
