November 8, 2007
China’s Stock Markets Have Topped
Yes, I’m a card-carrying member of the Top Pickers Club (1-800-TOP-PICK, alternate number: 1-800-IM-BROKE), but I’m pretty darn sure that the Chinese stock markets have peaked. I’d like to go on the record as saying that the high reached on October 19th (5891.72 in the CSI 300) was IT, and we won’t see prices above that level for a very long time (months if not years).
Then again, I’m probably dead wrong. ;-)
Cat: | Time: 9:46 am (utc+8)
November 8th, 2007 at 10:00 am
It does look toppy, but I’ve said that before and been wrong. It’s been so good to me, I’m reluctant to pull out of the FXI until I taste some of my own blood. I owe it that.
November 8th, 2007 at 10:05 am
CapGain: It’s definitely a top (maybe, lol). Remember that the FXI tracks H-share components; this is a Mainland Index… the thing is all the Gann nuts and Elliott nuts and Fibonacci nuts I’m in touch with (and I’m in touch with a lot of people) agree that this is it — and these guys NEVER agree with each other. ;-)
November 8th, 2007 at 10:14 am
It’s funny, I happened to look at the index before reading your blog, and was convinced that this is IT as well. But unlike you, this is only my third attempt at calling the top in CSI300 ;-)
If it blows thru 5892 again this time, I’ll quit picking top and have a intermediate term target of 8888 by early next year.
November 8th, 2007 at 10:28 am
What software do you use for your charts?
November 8th, 2007 at 11:01 am
If there’s any time to call a top in the Chinese markets, this would be it.
You probably read Michael Pettis (piaohaoreport, guest blogging for Setser at RGE now), but he’s been saying that there’s a very significant shadow banking system that is replacing the state-run, negative real interest rate official system.
If it has gotten to the point that people will break the law to entrust their money to someone, instead of throwing it at the Shanghai and Shenzhen markets, then that probably means there are no domestic savings left to throw at Chinese equities, and us furriners don’t seem like we’re very ready to fill their shoes..
November 8th, 2007 at 11:01 am
@Spock: My top call back in February I was pretty confident about and that was 3000 points ago, so yeah 3000 points from here would put it about 8888, an excellent guess for the *next* top. ;-)
@John: Bloomberg.
November 8th, 2007 at 11:03 am
AlexF: Michael who? Do you have a link? I’m interested in this shadow bank idea.
November 8th, 2007 at 11:04 am
Haha
November 8th, 2007 at 11:06 am
I should have said, “he referred to an informal banking system.” He hasn’t talked it up too much himself, just the “word on the street” as he heard it from someone he seems to regard as credible.
November 8th, 2007 at 11:15 am
Then I would guess BJ’s real estate market would get another boost from the hot money withdrawn from stock mkt:)
November 8th, 2007 at 11:16 am
The HSI looks like it’s working on a top too.
November 8th, 2007 at 11:30 am
@Alex: Thanks for the link, I’ll be sure to read it.
@ucla: Nah, the two ships will sink together. Fulicheng now at 25,000/sqm, lol.
@Brian: I’ll have to take a look later… too busy fielding angry calls from people who bought financials on my say-so. ;-)
November 8th, 2007 at 2:48 pm
A guy, a talking-head guest with pertinent credentials, remarked on Bloomberg video about two days ago that the recent decision to delay permitting Chinese citizens to participate directly in the Hong Kong market would effectively boost liquidity on the mainland. He also stated that the Hong Kong market would correct downward to something like 25,000.
November 8th, 2007 at 2:59 pm
Mike: Pertinent credentials, eh? I only take advice from bloggers who lounge around all day in their underwear. Anyone’s guess is as good as the next guy’s. ;-)
November 8th, 2007 at 3:29 pm
uclatrader: Four of my wife’s Beijing apartments are being bought by a guy who is disinvesting from the Shanghai stock market. All cash deal. We’re selling because we think the future’s not so bright for RE in BJ. CM, I wish we were getting 25k/sqm! more like 10, but thats still a good profit.
November 8th, 2007 at 3:44 pm
roy: that is why i am still holding my apt. i want a stock mkt crash badly:)
November 8th, 2007 at 3:44 pm
@roy: I think Ning’s RE timing is good, though you have to wonder what the buyer (whose stock market timing is also good) is thinking? 25K is crazy, CBD location be damned … there’s going to be a terrible shake-out here at some point, just dunno when.
@ucla: Careful what you wish for… what prices are they quoting over in Hou Xian Dai Cheng these days?
November 8th, 2007 at 4:06 pm
hahaha, I know mao xian. 14000/sqm.
November 9th, 2007 at 9:05 am
Well it’s a great time since proshares just rolled out their leveraged short ETF (FXP). I caught I nice 5% move today.
November 11th, 2007 at 9:55 pm
I agree that the world markets have topped recently. Look at the Swiss,CAC,FTSE and Mexican Indicies. They have rolled over and cut through the long term trend lines. A minimum 20 % correction should ensue over the coming months.
November 12th, 2007 at 4:25 pm
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