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A Look At Some of the Asian Markets

Recs

35

August 24, 2009 – Comments (8)

.... And it ain't pretty.

The Shanghai Stock Market (via the SSEC) has been speculation central. It is one of the biggest casinos out there right now. But like any streak in Blackjack where you leave your winnings on the table when the cards are finally going your way, the smart players know to take some of it off the action and back into your bankroll. ... because the house always wins eventually.

And like with any speculative endeavor, you only make money if you find somebody to buy it off you at a higher price: baseball cards, Tiffany lamps, Mark Rothko's (yeesh), Houses, or shares of Stock.

It looks to me like the smart money has already cashed out and is enjoying a nice meal at Carnevino. Everybody else is still at the table because all the economists are saying recession is over, the world is in recovery!

So while SSEC is the real casino (and potential canary in the coal mine), the HSI is a bit less erratic / correlates a bit closer to the rest of the world's markets. But it is still very much tied to the Chinese and Hong Kong economies.

So a very interesting observation presents itself: ..... The HSI is not making new highs with the rest of the American and European indices. I just checked Bloomberg (delayed unfortunately) and the high so far is 20750 today, still below the peak around 21300 reached a couple of weeks ago. Maybe it is too early (and they will break it today).

Original post from here: http://marketthoughtsandanalysis.blogspot.com/2009/08/look-at-some-of-asian-markets.html

 ..... Continued in comments section ..... 

8 Comments – Post Your Own

#1) On August 24, 2009 at 8:51 AM, binve (< 20) wrote:

But it is worth pondering, are the Asian markets, the leaders in receiving the speculative investment inflow, signaling the sea change of speculative investment outflow?





South Korea is looking a bit healthier (maybe not "healthy" so much, but at least less manic than the SSEC and HSI), but there is a *huge* resistance layer to be negotiated at the 62% retrace. Lets see how this one plays out

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#2) On August 24, 2009 at 9:06 AM, jddubya (61.66) wrote:

You know, you put some of best blogs out here on caps imo.

Another great blog! Wish i could multiple rec.

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#3) On August 24, 2009 at 9:39 AM, biotechmgr (36.50) wrote:

Nice analysis. Shanghai index may well be the canary in a coal mine. I'm looking for a mid-Sept. top in US markets.

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#4) On August 24, 2009 at 10:04 AM, binve (< 20) wrote:

jddubya, Wow, Thanks! I really appreciate that!!

biotechmgr, Thanks!! I also think mid-Sept is the top based on the current pace of the final C leg. However, Columbia and I were theorizing that this C will morph into an ending diagonal (so that it goes up to about the same price level but extends the action out to late Sept / Oct).

There is no evidence of that, but I put together a couple of posts that warned how to spot it if it did. I think you would really like the posts!

http://marketthoughtsandanalysis.blogspot.com/2009/08/now-thats-teamwork-and-wave-c-blaze-of.html

http://marketthoughtsandanalysis.blogspot.com/2009/08/looking-at-rally-progress-bigger.html

http://marketthoughtsandanalysis.blogspot.com/2009/08/indicator-thoughts-to-accompany-my-last.html

..

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#5) On August 24, 2009 at 12:41 PM, Tastylunch (29.54) wrote:

You know by looking athe $SSEC you cna see the US markets FUTURE (ooooooweeeeooo!)

 In all seriousness the two-four month mimicky is pretty amazing. They crash then we crash, they bottom then we bottom, they correct and we....

FUTURE!

I guess China really does lead the world .:)

Anyway the nikkei I find very interesting, if cycle theory is to be belived they have  to be near the their ultimate bottom one would think.

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#6) On August 24, 2009 at 12:47 PM, binve (< 20) wrote:

Hey Tasty,

I know man, I really do think SSEC is the canary in the coalmine here. I would be really suprised if in makes it back to the orange zone on my chart during the next rally attempt.

"Welcome to the WORLD of TOMORROW!!!!" .... :)

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#7) On August 24, 2009 at 1:48 PM, puccini3005 (29.83) wrote:

Welcome to the WORLD of TOMORROW!!!!

Another Futurama reference, perhaps? Love it!!

That's quite an eye opening chart. I have not seen that coupling before.  I guess keeping an eye on the SSEC is a prudent idea...

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#8) On August 24, 2009 at 2:20 PM, binve (< 20) wrote:

Yes indeed :) Tasty made a reference about the Future, so natually I parroted the most relevant Futurama quote (I am such a nerd) :)

Yeah, there are a few leader indices (SSEC being one, $SOX being another, etc.) from both and index and sector standpoints. And some of these leaders have not been looking so hot lately (have not been making higher highs with the rest of the markets). This divergence by the leaders could be a signal of things to come. 

Yep, definitely bears watching :)

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