As I mentioned in the previous post, chinese equities were looking extremely extended from their long term averages and after yesterday’s close, the news has come out that the securities regulator will be allowing short selling on more stocks in China while clamping  down on some ultra aggressive leveraging services being offered to speculators. As of yesterday the futures market has already crashed by 5% and the main market will follow suit. In my view this correction will not be over in a day or two and may extend into a few months to let the market consolidate. THIS IS A BEAR TRAP CORRECTION! H share markets remain undervalued but overbought and as such after the consolidation phase is over, the bull run in chinese equities should continue. A shares, while more expensive are still not yet at their historical peaks of valuations and as such they may also ......