WHEN in doubt, look at the long bond. This was the guiding principle for the Hang Seng Index this week.
Tugged back and forth between expectations of a slowing economy, interest rate drops in the United States and continuing bearish local indicators, the Hong Kong exchange jumped around like a frolicsome puppy on Wall Street's lead.
The US bond market was greatly impressed by the latest government economic figures, rising sharply after seeing clearer signs of an economic slowdown and the resulting potential for early interest rate cuts.
Ever-optimistic, the Hang Seng followed along and on Wednesday came back to life.
The irony is that one of the key reasons for the exchange's poor showing over the previous period had been that expected interest rate cuts suddenly seemed less likely to materialise.
We are clutching at the liquidity straw and fundamentals are long forgotten.
In what is hard to see as anything other than selling off the family silver to get through the lean times, companies such as Cheung Kong (Holdings) have been cashing in their own holdings to replace the property dollars missing from their corporate bank accounts.