From Ticker Sense
"Chinese Equity Markets Fall 12.2% Over 8 Days; Largest Correction in Over a Year"
Remember that headline? Neither do we. Granted, we made it up, but that is exactly what happened to China’s Shanghai Stock Exchange Composite Index from January 24th to February 5th of this year. The reason you probably don’t remember the large declines in China is because the S&P 500 was actually up 48 bps over the same time period. The reason you probably do remember the recent 8.84% skid in the same Chinese index is because A) it happened in one day, and B) the S&P 500 fell 3.47% on the very same day. The 2/27 declines in U.S. equities were largely attributed to the 8.84% one-day decline in China.
Below we highlight a six-month chart of the Shanghai Composite. After that 12.2% decline in late January, the index rallied to new highs, only to see the 8.84% decline that everyone and their mother’s heard about come immediately after those new highs. Since the recent declines, the index has made up more than half its losses and now stands just 4% away from another new high. It never made a "lower low" and continues to remain in an uptrend.
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