Sunday, December 27, 2009

CBOE China Index (CYX) vs Global Dow (GDOW)

here's a chart of CYX relative to GDOW over the past 9 years:

is China a bubble or the eternal Next Big Thing? I go with bubble, but I think the big money will likely come from betting against Chinese financials, which, aside from LFC, don't have a presence in CYX.

if you are not familiar with it, CYX (the CBOE China index) is an equally weighted index of the top Chinese stocks traded on US exchanges. there are currently 20 components, click here for the list.

the big financial entities mostly trade over in that Special Investment Vehicle they call Hong Kong. the FTSE/Xinhua China 25 index (FXT) is chalk full of banks and other financial companies. 47% of FXI (the ETF that tracks the index) according to iShares.

here's a long-term chart of the CYX:FXT ratio to ponder too: