Chinese stocks will decline by an additional 14% over the next three weeks as the market demonstrates a trading pattern that mimics that of the US crash in 1929, according to Tom DeMark, who predicted the bottom of the Shanghai Composite Index in 2013.
The benchmark for mainland stocks will sink to 3,200 after plunging 8.5% Monday to 3725.56 in the worst selloff in eight years, DeMark said on Monday. …
The Shanghai gauge had rebounded 16% from its July 8 low through Friday as officials went to extreme lengths to support stocks. … China Securities Finance hasn’t pulled support for equities and the government will “continue efforts to stabilize market and investor sentiment,” China Securities Regulatory Commission spokesman Zhang Xiaojun said in a statement after the close of trading Monday. …
“The die has been cast,” DeMark … said by phone. “You just cannot manipulate the market. Fundamentals dictate markets. … Markets bottom on bad news, not good news. You want to have the last seller sell. We got good news at the recent low. The rally is artificial. … Lip service and intervention like that — it’s false. There’s a certain way in which the market unfolds. The only thing the government could do is to postpone it.”
— Excerpt contributed by Jason Kelly
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