End of the China bull?

[satanoperca]

Chinese central bank have already moved to cut interest rates by 25bp; have reduced reserve requirements too

This tells me two things:

1. PBOC is concerned about what could be unfolding
2. PBOC is not afraid to counter quickly

I think it is still too early to say if it will crash (i.e. 40-60% depreciation). Have to wait and see how the market responds to this move.

The can just gets kicked again.

The Shanghai stock market has a market capitalization of approx 5.5T, with a 20% haircut in just two weeks, it has wiped out the equivalence of our entire ASX.

While the PBOC has moved to try and slow things down, is the weight of their massive amount of debt really going to reverse the unreversible.

Has become interesting.

 

[CanOz]

A weekly SC and a Daily...

An opportunity to buy soon, or a dead cat bounce....we'll see, either way the intra-day vol will be nice

 

[waterbottle]

A weekly SC and a Daily...

An opportunity to buy soon, or a dead cat bounce....we'll see, either way the intra-day vol will be nice

I would lean towards a dead cat bounce - but then again I'm not playing in Shanghai so my opinion is worthless :

Too much going on at the moment to justify a bullish sentiment. Besides, the last time there was a run-up like this (2006 & 2007) the following crash involved a dead cat bounce to ~60-75% of the preceding peak before it resumed the fall. If it plays out the same way this time around, then there is probably going to be a bounce lasting 2-3 months before the falls resume.

I'm not willing to put my money on it though, China is too scary for me ::

 

[satanoperca]

A weekly SC and a Daily...

An opportunity to buy soon, or a dead cat bounce....we'll see, either way the intra-day vol will be nice

Hi Canoz,

How are things in China?

Just curious, how will you define a dead cat bounce? Based on volume.

I am expecting there will be some retrace over the next week, but look at the previous highs and then lows, it could be all the way to the bottom again.

Has the rapid increase in the index been based on fundamentals or gambling, we know the Chinese love a good bet.

Looking forward to being back in Shenzhen and Shanghai in coming months, fascinating country and culture.

China will one day rule the world.

 

[CanOz]

Hi Canoz,

How are things in China?

Just curious, how will you define a dead cat bounce? Based on volume.

I am expecting there will be some retrace over the next week, but look at the previous highs and then lows, it could be all the way to the bottom again.

Has the rapid increase in the index been based on fundamentals or gambling, we know the Chinese love a good bet.

Looking forward to being back in Shenzhen and Shanghai in coming months, fascinating country and culture.

China will one day rule the world.

Heya mate, drop me a line when you're back, shout ya a drink at the Big Bamboo!

Actually the HHI and HSI have put in a solid short term low, so it will be interesting to see how it plays out. I'm not trying to predict here, just saying there are some key areas to watch. This week should be pretty interesting!

 

[CanOz]

06:57 (CN) China Shanghai stock exchanges amends rules on margin trading; To allow real estate to be used as collateral in margin calls - Chinese press - Source TradeTheNews.com

Two bubbles 1 stone?

 

[skc]

Two bubbles 1 stone?

That sounds fking crazy. Talk about liquidity mismatch.

More like 2 bubles with 1 pin.

 

[notting]

06:57 (CN) China Shanghai stock exchanges amends rules on margin trading; To allow real estate to be used as collateral in margin calls - Chinese press - Source TradeTheNews.com

But I thought my house was safe and I cold totally go for it! - China Town.

Two bubbles 1 stone?

LOL

Further alarming development.

Market insiders have been chattering about the coming end of the partnership between HSBC and China's Markit for months, HSBC is ending its sponsorship of the indicator because of pressure from Beijing and the insane charges Beijing was manipulating into the independent data collection to squeeze out genuine transparency.

They also allowed a government run pensions fund to now purchase stocks.
In summary, Communist Pigs popped the bubble by selling down to 4500 by liquidating some of China's state-owned investment company, Central Huijin Investment,and are now supporting with the peoples savings at around the 3900 with the peoples pensions!!! They will probably try to keep it in that range to give an air of stability.

 

[CanOz]

I reckon it might be too little too late and the brokers are holding some big losses with clients that can't or won't pay. So they put this rule in to cut off the bleeding before it really gets out of control...

 

[CanOz]

Since the highs, out of 16 days, there have been 9 afternoon sell offs, 1 unchanged and 6 higher closes than the morning.

 

[satanoperca]

Hi Canoz,
Will contact you once i have confirmed next trip back to China, up on the gold coast at the moment, sorta feels like Shanghai with a little more English.

I dont see any difference with brokers in China use property as collateral on margin loans, THE BROKERS/BANKS in Oz do the same thing. I have some empathy for the Chinese, they are be suckered into the western casino after working so hard for their savings.

Cannot see the index rebounding much further, the world has nearly reached debt saturation, just another year or two to go and pssssh the deflation will start. The index will follow suit.

Greece is the first major card to be shown. We didnt learn sh....t from Lehmann. Hang the bankers i say, no better than ice/meth dealers.

 

[waterbottle]

Very scary... What will the world look like post-China crash? Would the Chinese civilians even tolerate a crash?

 

[rimtas]

Very scary... What will the world look like post-China crash?

It will look like a bargain.

 

[satanoperca]

It will look like a bargain.

At what point will it be a bargain?

CRASHING NOW, jump in for bargains? No way, still got a way to go.

Love to see the expression on 10's of millions investors faces aftwr margin call after margin call and 30 years savings disappear

 

[qldfrog]

Love to see the expression on 10's of millions investors faces aftwr margin call after margin call and 30 years savings disappear

not sure I would love it, will be pained to be honest, Let's keep with Julia's spirit

 

[notting]

At what point will it be a bargain?

CRASHING NOW, jump in for bargains? No way, still got a way to go.

Love to see the expression on 10's of millions investors faces aftwr margin call after margin call and 30 years savings disappear

It started the year at 2100, it's been a great year for any one in longer than 6 months. If you put all your savings in after the move from 2100 to 3500 you were probably too stupid to hold onto your money no matter what you did. It hasn't even retraced to a normal fib retracement level of 61.8%.

Let's see if it can get down to 3200 something to determine if it's really a bear market as apposed to just a berzerk market.

 

[waterbottle]

At what point will it be a bargain?

CRASHING NOW, jump in for bargains? No way, still got a way to go.

Love to see the expression on 10's of millions investors faces aftwr margin call after margin call and 30 years savings disappear

I wouldn't.

Remember what happened the last time a tonne of investors lost cash i.e. GFC? Print print print. Investors as a collective, are too big to fail - letting them fail would be a political and social disaster. I'm sure that they'll find a new way to keep the cogs turning.

 

[satanoperca]

I wouldn't.

Remember what happened the last time a tonne of investors lost cash i.e. GFC? Print print print. Investors as a collective, are too big to fail - letting them fail would be a political and social disaster. I'm sure that they'll find a new way to keep the cogs turning.

While i agree with your statement, it is only when govnuts stop this mantra that everything is to big to fail, then we/the world can finally move forward in a constructive/sustainable and productive way. People must learn, that gambling with your money and others rarely works out well in the short term and never in the long term.
Kicking the can just doesnt work in the long term. We need leaders with balls and direction, we need a populas that is accepting of what is fair and justifiable with hardwork. F...K LCD TVs and new cars and 5 IPs doesnt make our society a good one.

 

[notting]

We need leaders with balls and direction, we need a populas that is accepting of what is fair and justifiable with hardwork.

Socialism and democracy would work perfectly if the humans on the whole could behave beyond their short sighted self interest.

 

[waterbottle]

It started the year at 2100, it's been a great year for any one in longer than 6 months. If you put all your savings in after the move from 2100 to 3500 you were probably too stupid to hold onto your money no matter what you did. It hasn't even retraced to a normal fib retracement level of 61.8%.

Let's see if it can get down to 3200 something to determine if it's really a bear market as apposed to just a berzerk market.

What about the people who got in from 3686 to 5180?
There are definitely some people out there who are sitting on some big losses.

Here are some charts I made: