China's restrictions on trading has shut down large parts of the market.
Well, that isn't working so well. A day or so after China announced major restrictions on trading, halted IPOs, and initiated a major effort to buy stocks, half of the entire stock market has been frozen.
The Shanghai Composite closed down 5.9 percent, and the Shenzhen fell 2.5 percent. The fact the Shanghai is still up 8 percent for the year, and the Shenzhen 33 percent, is beside the point.
The Shenzhen is 40 percent off its highs. That's what matters—because millions of investors have come into the market in the last few months.
We have no idea what the Chinese stock market is doing, since suspensions of trading and daily limit falls of 10 percent or more have made it impossible to determine stock values.
However, U.S.-based China ETFs are trading, and markets here seem to be pricing in another down day in China. The X-trackers CSI 300, the largest of the mainland China ETFs, is opening down 7 percent.
Stocks falling? Let's stop trading! That will help.