Sunday, December 7, 2014

SSEC China Weekly Chart Record Highs Parabolic Price Move on PBOC Easy Money

The Shanghai Index is parabolic goosed by the PBOC offering triple R cuts, then a shock and awe surprise rate cut, then more talk of additional triple R cuts. The central bankers are the market. The stock market goes vertical on the news of easy money. China's property bubble may finally be popping but no one cares since the PBOC will pump the stock market allowing savvy long traders to rape this market for perhaps a year or two,at least for a few weeks and months, due to the easy money policies.

The SSEC is at record highs not seen since 2011. The ADX shows the strong down trend in place through 2011, 2012 and 2013 but then petering out in 2014 so you knew a basing period was occurring. Price launches higher since summer time and the ADX is above 25 now at 40 signaling a continuing strong trend for the price move higher. The indicators are all long and strong sans the stochastics that are overbot and need price to take a rest from the rocket launch move higher in the near term. After any near-term pull back price will want to come back up for higher highs to satisfy the strength showing in the indicators. Looks like the Chinese stocks will be the next favorite flavor for the global central banker orgy party.

The Stock Connect link is now open allowing foreign investors to buy Chinese stocks directly via Hong Kong which is fortuitous timing that will help pump Chinese stocks higher. Markets are comical. China's growth is dropping under 7% and is likely already there while their property bubble is popping but their stock market should now rally due to PBOC money printing. Oil prices are dropping in part to lower Chinese demand but no one cares about any of this stuff; these notions are such old-school thinking. As long as the central bankers keep pumping, every day is a party day. Have a sip of the Chinese wine. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 7:31 AM on Monday, 12/8/14: China Trade data disappoints but traders are happy sending the SSEC up almost +3% above 3000. Bad news is good news since traders expect the PBOC to keep pumping stocks with rate cuts and triple R cuts.

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