The Chart below shows the close correlation between China (red line) and the Steel stocks (black line) since the start of 2012. According to StockCharts, “the 60-day Correlation Coefficient (below chart) shows an extremely high correlation of .96 between the two markets. Notice that the rally in the FXI (China ETF) this month to the highest level in more than a year has coincided with an upturn in steel stocks.”

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