China - Market Direction 01 (May 12 - Jul 15)

[winston]

100% Gains Coming in China By Dr. Steve Sjuggerud
Monday, November 24, 2014

"Chinese stocks have the potential to deliver triple-digit gains within 24 months," I said on CNBC earlier this month.

So far, so good…

Since I appeared on CNBC, local Chinese stocks are up 8%.

There's plenty more to come, as the Chinese stock market is getting a massive tailwind from the Chinese government…

On Friday, China announced that it lowered interest rates for the first time since 2012. This is great news… lower interest rates add more fuel to the fire in China's stock market.

This is exactly what's happened in the U.S. over the past few years (what I've called the "Bernanke Asset Bubble"). Now China is following suit, cutting interest rates and boosting asset prices in the process.

Also, last week China launched the Shanghai-Hong Kong Stock Connect. In short, this gives more foreigners than ever the ability to buy local Chinese stocks.

In addition, the Chinese government has been on a public-relations campaign to pump up the stock market.

Three weeks ago in DailyWealth, I called China "The Best Market for 100% Gains Now."

I showed how China is cheap, hated, and now in an uptrend. I explained how Chinese shares have soared by more than 100% twice in the last decade… including a 500% gain from 2005 to 2007.

I hope you've taken advantage of my advice to buy China…

Chinese stocks bottomed this year at around 2,000 on the Shanghai Index. Now the index sits closer to 2,500. That's a 25% gain so far.

In my opinion, the fun is not nearly over, yet. Chinese stocks are still cheap. Most global investors have ignored China (up until the last week or so), and the uptrend is in place.

Most importantly, the Chinese government just cut interest rates… Taking a page from Bernanke's playbook and boosting Chinese stock prices.

Yes, you missed out on the first 25% here… But this is just the first part of a massive, triple-digit percentage move in China.

My True Wealth subscribers are up in my recommended China-stock fund, ASHR.

If you haven't bought it yet, I urge you to consider it…

[winston]

The U.S. dollar continues its move higher… up 10% over the past five months.

[winston]

Morgan Stanley: An “ultra-bull” market could be starting here

Source: Bloomberg:

http://thecrux.com/morgan-stanley-an-ul ... 37gMXBU%3D

[behappyalways]

[经济信息联播]上海：明年股市 有人看好有人担忧
http://jingji.cntv.cn/2014/12/05/VIDE14 ... 1607.shtml


沪深两市成交量首破万亿 [1/6]
http://news.cntv.cn/2014/12/06/PHOA1417 ... .shtml#g=1

[winston]

Short-term outlook good for A shares by Andrew Wong Wai-hong

The Shanghai Composite Index rose 9.5 percent and the H-share index more than 4 percent last week.

All the policy hints emanating from Beijing and attitude of retail investors are good for the A-share market.

It is believed that a serious bubble will not develop in the Shanghai index until the index rises above 5,000 points because in the second quarter of next year A shares may be included in the MSCI, after which about three to six months will be for speculation, so the crisis should appear after next September.

As for the H-share index, it is believed that it will catch up with the Shanghai composite in the short term.

Will an active stock market really completely solve Chinese economic problems, such as whether enterprises can raise funds through the market to reduce dependence on banks so that credit risks can be balanced out?

Or will excessive output and inventory, redundant construction and other issues happen again?

My optimism on A shares doesn't mean I don't think the market is mad.

The best method for analyzing the A-share market's performance is to estimate how serious any bursting of the bubble will be, or to consider when the central government will introduce measures to press down A shares. But the chances of those appearing in the next six months are slim.

Source: The Standard HK

[winston]

Fidelity expects A share to continue higher
2014/12/05 17:40

The transaction amount for Chinese A-shares exceeded RMB 1 trillion today.

Fidelity Worldwide Investment's global investment director Andrew Wells stated that the structural reforms and monetary policies are favorable for stock market, yet the P/E ratio for domestic stock was still low. However, it is believed that the market will remain bullish.

Source: AAStocks Financial News

[behappyalways]

Five Charts That Show China’s Stock Boom Is Unprecedented
http://www.bloomberg.com/news/2014-12-0 ... ented.html

[winston]

<SH & SZ Mk>SHCI, SZCI tumble over 4-5% with record turnover

Shanghai Composite Index and Shenzhen Component Index saw rising sell orders in the afternoon and finally ended at 2,856 and 10,116, down 5.4% and 4.2% respectively.

Turnover of the two markets increased to RMB793.3 billion and RMB473.1 billion (or RMB1.2664 trillion in total, hitting a record high again).

In the Shanghai-Hong Kong Stock Connect sector, 40 stocks were suspended against further decline.

Source: AAStocks Financial News

[winston]

These stocks are screaming higher. Here’s what to do… by Jeff Clark

Chinese stocks are screaming higher.

The Shanghai Stock Exchange Composite Index (the “SSEC”) – China’s version of the Dow Jones Industrial Average – hit a new 52-week high on Friday. It’s now trading at its highest level in nearly four years. It’s up more than 40% since I told you about Chinese stocks back in May.

Traders who took my advice to buy are sitting on big gains. And there are likely larger gains ahead.

But after such a big run-up in a short amount of time, the SSEC is likely to suffer a brief pullback…

Take a look at this long-term chart of the SSEC…

In July, the SSEC broke out of a long-term consolidating-wedge pattern (the blue lines). The index was trading at around 2,100 back then. It then began a terrific rally.

In October, the SSEC was poised to break above its first resistance line at about 2,500.

I said:

Once it can get above 2,500, there’s a lot of room for China’s market to move even higher. The next resistance level is all the way up at 3,100.

As you can see on the chart, the SSEC is now rapidly approaching the 3,100 target. The index is up almost 50% for the year. If the SSEC can break above 3,100, it brings the 3,500 resistance level into play. So I’m bullish on China in the long term.

But we’re likely to see a pullback in the short term.

Based on the look of the one-year chart, there are reasons to suspect the SSEC won’t break above the 3,100 level on the first attempt. Take a look…

After the near-vertical move of the past two weeks, China’s stock market is overbought. The SSEC is 17% above its 50-day moving average (DMA) line. The index rarely stretches more than 10% above or below this line before coming back to test it as support or resistance. So China’s market may be due for a breather soon.

Also, the 14-day relative strength index (RSI) is in overbought territory. The RSI helps measure overbought and oversold conditions. Any move above 70 indicates an overbought condition. The 14-day RSI is currently above 92 – the highest reading of the year.

The 14-day RSI pushed into overbought territory two previous times this year (marked by the blue arrows on the chart). Both times, the SSEC chopped around for about a month, worked off the overbought condition, and gave the 50-DMA line time to move up closer to the price of the index.

With the SSEC extended to the upside, overbought, and approaching resistance, it’s reasonable to expect at least a pause in the rally – if not a more significant pullback.

If you jumped into the Chinese market on any of my previous recommendations, now is the time to tighten up your stops or take some profits off the table.

If the SSEC does start to pull back, the first level of support is at 2,500 (which lines up with the 50-DMA line). That will be the place to get back into the trade. And if you missed out on the move in China this year, this will offer a lower-risk chance to hop into the trade.

Source: The Stansberry Short Report

http://thecrux.com/as-predicted-these-s ... 37gMXBU%3D

[winston]

The Dumbest Investment Thinking Ever – Are You Guilty? By Dr. Steve Sjuggerud

"It's gone up Steve, so it can't go up…"

This is the dumbest investment thinking, ever. Yet I hear it all the time.

Right now, I'm hearing it about China. "China is up Steve, so it can't go up."

Specifically, my True Wealth subscribers are up 30% in three months in China. (I wrote a full issue of my True Wealth newsletter about buying Chinese stocks three months ago and I recommended buying ASHR – a China-stock fund.)

Now people are grumbling to me… "Steve, it can't go up any more."

If you think like that, my friend, I'm sorry… but you'll never grow wealthy through investing.

Look, my True Wealth subscribers are sitting on a 390% gain in a health care fund that we bought in 2011…

How do you make 390%?

There's one thing you have to do to make a gain like that… And that is you must NOT sell when you are up 10%, 20%, or 30%. Unfortunately, that is what most people do.

You have to give yourself the chance to have a big winner.

You only get so many big winners in your investing lifetime… But if you sell early, then you have cheated yourself.

Right now, my subscribers are sitting on eight – yes, eight – triple-digit winners. And that's after selling out of a few triple-digit winners a month ago.

If you want triple-digit winners, you have to be willing to let your investment go up!

You can't worry so much about where it has been so far… You have to think about where it's going…

Take my current China trade for example… My subscribers are up 30% in China in the last three months.

Let's consider what has happened the last few times that China went up 30% within six months.

Something extraordinary has happened…

Over the past dozen years, when China has soared by 30% or more within six months, it averaged 123% MORE gains over the next year.

You can see it in the chart below. The green circles show six-month periods where Chinese stocks went up by 30%. And you can see the massive gains that followed.

I can't guarantee that Chinese stocks can or will go up from here.

But I can tell you that the argument that I hear nearly every day… that "stocks can't go up any more, because they've gone up" is dumb. It is some of the dumbest thinking in investing.

Chinese stocks are not expensive yet. Most international investors have not bought yet, as most are incredibly skeptical of China. These are indicators to me that the top is not in yet in China…

You are welcome to NOT buy China for a lot of reasons… There are plenty to choose from.

But please, don't use the excuse that "it has gone up, so it can't go up." That is shallow and dumb thinking not backed up by anything. That thinking is founded in emotion, and not in the hard facts.

You will hear this for the rest of your life…

"It has gone up, therefore it can't go up."

"Gotta take profits while you've got 'em."

Don't listen to it. It is not right. Don't fall for it. It is the dumbest thinking in investing.

If you want to make 390% profits in something, then you can't sell early. The reason the typical investor sells early is because "it has gone up." Of course, the typical investor underperforms the market.

I urge you… don't be typical. Remember this letter.

And please remember this: Don't sell just because something has "gone up."

Source: www.dailywealth.com