While few expect the Chinese economy to go into recession, growth could slow enough to affect global demand for raw materials (metals, oil etc...)

While European issues are not fully to blame for US woes, economic weakness in Europe is certainly not helping the global economy. A slowdown in China is also exasperating the economic picture and putting a damper on demand for industrial metals. While few expect the Chinese economy to go into recession, growth could slow enough to affect global demand for raw materials (metals, oil etc...). Chart 7 shows the Shanghai Composite ($SSEC) failing at the 200-day SMA in early May and breaking triangle support in early June. The index fell sharply again this week and a test of the lows looks likely.

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Chart 7