It was a traumatic awakening for the Chinese post the few day holidays in mainland China. It is impossible to have much view on the markets after such dramatic fall in all indices.

The CSI 300 fell by 5.8%, not the 100 day as well as a gap another 4-5% lower, but irrespective of possible supports, this price action is horrible.

Real estate is a huge sector in China, and home to a lot of “risky trades”. Shanghai property index fell by 6%  overnight, closing right on the 100 day as well as the trend line from October lows.

Moving to the most speculative index of them all, the ChiNext, this index crashed by 8%, putting in a candle we usually see when a stock has profit warned. Where Chinese indices are going next nobody knows, but leverage is huge.

Another factor that people are not mentioning, is the fact stock market volumes have continued shrinking over past weeks. We wonder what could happened if selling pressure gets “supported” with an increase of volumes?

Source; charts by Bloomberg