Jeff deGraaf, chairman at New York-based Renaissance Macro Research, thinks most investors have stayed out of Crash2, Rally4. He uses simple maths to deduce this: the volumes traded are unusually low.

This is one of those obvious things to look for that gets overlooked when all around you are lighting Havanas with 1000SFr notes.

“This entire 150-point rally has been one of the weaker rallies in my 25-year career,” said deGraaf, the top-ranked technical analyst in Institutional Investor’s annual survey for the last 11 years,“fade this breakout”. I think this is American for “it’ll soon be over” but I can’t be sure; what I do recommend you do is check it out.

While the three week ‘rally’ is the fastest for many years, the trading volume was the lowest of the year: most investors played safe and stayed out. So much for market sentiment.

A ‘true’ rally asks for 50-60% of stocks to be hitting around 15-20 day highs. The ratio has rarely been above 35% since it started….whereas those stocks signalling ‘oversold’ on the red light gizmo now stand at 53%.

Meanwhile, back to the issue of using unadjusted Dollars to measure Chinese slowdown. There is a degree of bubbling under about this, which of course I can categorically state because I now have a Google alert about it. But that’s enough self deprecation: the very latest data using this basis shows that Chinese gdp rose only 4.25% in  2015 Q4- a gain of $439 billion. Two years before, China added $1.1 trillion to the global economy, expanding 13% percent from a year earlier.

Most people have 5-6% growth baked in for 2016. With a real deceleration number of 2.8:1, that simply isn’t going to happen.

China is skidding to a halt because the lower end of Western consumers (always their biggest customers) are living with job loss and wage cuts having maxed out their credit. It is that simple: we should stop looking for arcane interpretations, and think ‘30% wage depreciation + austerity + less welfare = consumption collapse’.

There are two camps on China: those who think the Inscrutable Ones are gently easing over towards a ‘more balanced’ economy but making a poor fist of explaining this; and those who think China is in headless chicken mode, but the Davos Dingbats need another narrative at the moment [see first camp]. I’m in the latter camp.