Friday sees more evidence of the United States economy hitting capacity limits. Higher interest rates seem a near certainty. Monday morning and the rate-phobic Hong Kong market reacted strongly, adding 80 points by the close. Such defiance looks inappropriate, considering almost all market drivers are pointing the wrong way. Evidence of a correction in the mass residential property market is increasingly strong. Higher interest rates can only exacerbate the trend. Brokers talk of a stock market idling between 11,800 and 12,500 points as fully invested fund managers trim holdings. In the short term, at least, Hong Kong looks unlikely to provide fireworks. What is surprising is the relatively strong red-chip showing through the correction. Having performed spectacularly on the way up, China concept stocks seem to have resisted the usual pattern of over-shooting on the way down. Clearly, the China investment theme has not died with the bull market. Brokers are increasingly switching their regional sales pitch out of Hong Kong. Buy recommendations are focused on the laggard plays of Thailand and South Korea on the basis of catch-up. Fundamentals in both markets look lousy, but a temporary rebound seems likely. Buy the rumour, sell the fact seems the appropriate course. Who said Asian market analysis was not deeply rigorous?