Notice the thick blue line and how FXI (25 largest and most liquid China Stocks) crosses that trendline on the point and figure chart. This shows us the strength of the most leading emerging market and how this market had impacted this rally for the past three months since the March bottom.
It is clear that China is buying up natural resources and stimulating their economy. The real estate market and construction industries in China are heating up. They are building power plants, mines and roads.
There are a few signs that there might be a slight short term pullback the next few weeks from the non confirmation in relative strength and low volume. However, this is the time to get into companies that the Chinese need which have huge amounts of natural resources.
The secret is out China is on the search for precious metals and natural resources. These next couple of days will give second chances to get into companies that have those assets.
We know what the Chinese need and are able tom make huge gains in finding the companies that have the greatest leverage to these necessities.