The bounce in China's onshore stock market has been decidedly half-hearted, lasting only for a few days after it began on July 9 despite the massive government intervention involved. The brief rally started, entirely logically, at the steeply rising 40-week moving average at 3,750 points on the CSI 300 Index. Now, three weeks later, it is back down there again, battling to hold the key long-term trend. We doubt it will. The 40-week moving-average uptrend at 44.5 per cent is still steep by most standards, but of course this is no ordinary situation; and it is slowing sharply, from close to 100 per cent. Stock market crashes generally have two down legs, and the same should be expected here. The eventual recovery will be long and hard. John Schofield is the founder of Tempus Investment Research
