arcaderabit.com

The Chinese stock market had been in a meteoric rise since January 2006, driven by an orgy of speculation in which millions of first-time domestic investors took part. In many cases, this was their first exposure to raw capitalism, and may have fed to a large extent on the Chinese proclivity to gamble. In any event, the bloom came off the rose in October 2007, at about the same time as the U.S. stock markets peaked. Just as in our own case, the Japanese Candlesticks price formations in the Chinese market foretold a massive decline, which indeed has taken place - to the extent that the market has lost half of its market value since last October. There have been stories in the print media about people and families having lost their entire life savings amidst outpourings of grief and recriminations against the system. But those of us who understand the Candles knew what was coming - not that we were invested heavily in the Chinese market, if at all; but the signals were there in plain view for those who knew how to read them.