ridethepig | Chinese Equities ... The Slaughtered Pig
Diupdate
The "hanging" candle
The problem is as follows:
If the only way to reach risk-on in and remove social distancing is either via a vaccine (most preferred option although not really in scope till 2021) or further extreme lockdown measures (as you all know extremely costly and damaging to the monetary side) to completely remove the virus from circulation. With all roads towards confidence blockaded, it's more advisable to take a contrarian stance to the equity promoters.
This is not an easy one to add too. It depends on the circumstances next week, namely on the virus front as Europe looks set to follow the US and lose control. This is something I would like you all to anticipate: it is all too easy as for the Robinhood pawns who tend to be weak when tested.
The flows are as follows:
1️⃣ the flows themselves in US equities are open to attack
2️⃣ the final nail in the coffin comes from long bonds which are too much pressure to maintain: this means that the necessary complacency forces retail to buy all the junk while those smart enough unload and exert Puts / shorts.
Here the notion of parking capital in China in the short-term turns out to be deceptive and soft. Once more the reason can be found in the previous SHCOMP swings: in diagrams attached below you will see excellent examples of PBOC blockaders and failures.
Ride the PBOC, Feb 3rd 2020
The attempt to ride the CB flows, the hanging lows were relatively obvious and panic creates weakness which can be bought with confidence like passing clouds.
SHCOMP Market Commentary, Feb 24th 2020
The pullback was a result of the PBOC and sharp hands. Many moons ago I would've been convinced by this market...not today.
This leads to the long run choppy conditions and unfavourable outcome of soft hands who placed their stops too blatently. The sell side is still there on the move, ride weakness is the strategy and balance out at key support levels.
Thanks for keeping the feedback coming 👍 or 👎
The problem is as follows:
If the only way to reach risk-on in and remove social distancing is either via a vaccine (most preferred option although not really in scope till 2021) or further extreme lockdown measures (as you all know extremely costly and damaging to the monetary side) to completely remove the virus from circulation. With all roads towards confidence blockaded, it's more advisable to take a contrarian stance to the equity promoters.
This is not an easy one to add too. It depends on the circumstances next week, namely on the virus front as Europe looks set to follow the US and lose control. This is something I would like you all to anticipate: it is all too easy as for the Robinhood pawns who tend to be weak when tested.
The flows are as follows:
1️⃣ the flows themselves in US equities are open to attack
2️⃣ the final nail in the coffin comes from long bonds which are too much pressure to maintain: this means that the necessary complacency forces retail to buy all the junk while those smart enough unload and exert Puts / shorts.
Here the notion of parking capital in China in the short-term turns out to be deceptive and soft. Once more the reason can be found in the previous SHCOMP swings: in diagrams attached below you will see excellent examples of PBOC blockaders and failures.
Ride the PBOC, Feb 3rd 2020
The attempt to ride the CB flows, the hanging lows were relatively obvious and panic creates weakness which can be bought with confidence like passing clouds.
SHCOMP Market Commentary, Feb 24th 2020
The pullback was a result of the PBOC and sharp hands. Many moons ago I would've been convinced by this market...not today.
This leads to the long run choppy conditions and unfavourable outcome of soft hands who placed their stops too blatently. The sell side is still there on the move, ride weakness is the strategy and balance out at key support levels.
Thanks for keeping the feedback coming 👍 or 👎
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