Chinese Economics Thread

[Brumby]

I am not bearish, from now till end of the year. I don't see lower highs and lower lows, but a rebound in say, another three weeks from the current correction. It will be a choppy market.

 

[broadsword]

Also, the 125% rise from the start of the year had little to do with economic expansions and more with SoE and big investors making unsound investments.

The trigger was the expectation of the opening of the Shanghai market to foreign investors. This link explains better

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The Index continued its run after the opening.

 

[broadsword]

View attachment 16215

I have a different way of reading the market. Trend lines have their own strength and weaknesses compared with mine.

 

[Brumby]

The traditional take on stock markets don't necessarily apply to China, because it is so new and so poorly regulated. Also, the 125% rise from the start of the year had little to do with economic expansions and more with SoE and big investors making unsound investments. While some pensioners and little guys took it in the shorts, most of loses were by SoEs. That's the reason the IMF said China's stock crash will have little effect on the country's GDP growth. Another thing to remember is while SoEs took the bloodbath, they also gained ~125% before the crash of ~40%. For the year, they're still up by around 70%, so I cry purple Koolaid tears for those poor little plutocrats that lost $3 trillion.

You might be right about the economy. I don't know enough about it to make a judgement. However the chart of the Shanghai index is not something I would be optimistic about and be bullish - at least not in the immediate future. Barring some major initiatives by the central authorities, I expect further selling once 3400 is breached with support down at 2300. The key level to watch is 3400 and whether it can hold. Personally I don't think so but I suspect the breached would not be immediate. If it is, then the market is much weaker than I think.

 

[Brumby]

I have a different way of reading the market. Trend lines have their own strength and weaknesses compared with mine.

My pessimism is not on the break of the TL, but the market's inability to remount support and its subsequent strong rejection. That is a very strong technical sell signal.

 

[SamuraiBlue]

If i remember correctly many of the stock brands had been barred from sales and the people who owns large amounts of any single brand are barred as well. If and when they are allowed they will no doubt start selling as well. I wonder what will happen then.

 

[broadsword]

If i remember correctly many of the stock brands had been barred from sales and the people who owns large amounts of any single brand are barred as well. If and when they are allowed they will no doubt start selling as well. I wonder what will happen then.

It will depend on the phase of the market, bull or bear. If it is in the middle of of a bull, the selling will be absorbed in the belief they are cheap and their prices will rise further.

 

[broadsword]

My pessimism is not on the break of the TL, but the market's inability to remount support and its subsequent strong rejection. That is a very strong technical sell signal.

3400 is the support. The selling was because it is locked in a channel, and it is a big one. So after two weeks another rebound.

 

[Blackstone]

If i remember correctly many of the stock brands had been barred from sales and the people who owns large amounts of any single brand are barred as well. If and when they are allowed they will no doubt start selling as well. I wonder what will happen then.

I wonder how many big stock holders (mostly SoE elites) would end up on corruption charges.

 

[broadsword]

I wonder how many big stock holders (mostly SoE elites) would end up on corruption charges.

Remember to keep count.