XIN9 trade ideas
Good chance to get in or accumulate China A50It has reached a high of 13,942 from 8 June to 24 June without able to breakout higher. This calls for a short term sell opportunity.
Expect it to break down from the bullish trend line and heads towards 13,337 over the next few weeks.
This discount will present a great buying opportunity for those who have yet to come onboard China index.
CN50 Test Major Support, Potential To Breakout To All Time HighsCn50 broke out from a major level and is now back testing prior support. On the monthly chart Cn50 has been creating a very large ascending wedge pattern and broke out. The market has the potential of breaking out to all time highs and starting a large bull market. I'm bullish on China over the long run and believe a very strong bull market could form from this level lasting many years.
Emotions steer our actions, Reasons justify itWhether we like it or not, behind every decision we made, be it trading or in other aspects of your life, our decisions are always based on a set of emotions. Reasons offer a false sense of control of the situation.
We do things because it gives us pleasure (love, being accepted, respected, etc) or if it avoids pain (stress, anger, regrets, anxiety, feelings of loss, etc). Emotions leads us to actions and reasons lead to explanations (how we explain things to ourselves after we have bought something).
Think of a time when you go grocery shopping without a shopping list and ends up buying a bunch of things that you may not need. On your way home, you would explain to yourself why your decision is right (sure, we can use the organic marmalade jam for breakfast, 6 months later, it is still sitting in the fridge).
This is very crucial in the game of trading. Nobody wants to lose , be it small or big losses. There is a winner's mindset in all traders and we make our decision in a way to protect this self image of a winner within us. We feel that we cannot be let down somehow. In short, we want to control the outcome of the game.
Please note that trading is really a game of probability and thus it is essential that we must accept and come to terms that the outcome is hard for us to determine. The faster we accept this, the better we will see our performance in trading.
You can have a bullish trend, low RSI, everything that points to your favour and you execute a long position. Yet, Mr Market surprises you with a gap down and you hit your stop loss. Unbelievable but it happens ! Not once, many a times to frustrate traders to quit and come back to the game again and again.
Learning to focus on the journey '; the performance of each trade rather than predicting the outcome of the trend or the magic number at the top or bottom would be a wiser and more effective route to take, imo. For example, keeping strictly to your stop loss and not having 2nd thoughts that things may change (outcome) so you adjust your SL wider to accomodate it and not take immediate loss. Your fear of taking loss in each trade becomes a bad habit that you pick up unconsciously and if you are lucky to wing it, you would do it again.
I know it feels "high" , great and even respected if you are able to pick tops and bottom or calls the right trend and people keep asking you for trading advice. This is not that important, really in the game of trading. Do not let this "guru" hat clouds your judgement. Stay grounded and stay focus at each trade you execute. It may be pennies that you lose or win but the thoughts put into it will shape your trading future. Like a strand of rope, it gets thicker and thicker as you spun your way to more trades and without you knowing, you are caught in your own web of repetitive patterns.
CHINA 50! ROCK OR BUST?The China 50 took off like a rocket, leaving behind the DJI and other country indices. This is the CN50's biggest rally in a year. State media agencies talked up the index promising a post-coronavirus boom. Then the China Securities Journal made similar promises.
This caused an almost 6% charge north in one day! However, there did not appear to be significant underlying volume - which is a bit worrying.
But volume isn't everything. I show two points on the chart that I think may be comparable. In technical terms the two recent weekly candles are the biggest since 2013. The momentum seen on lower time frames is ridiculous. In these situations a minor correction is expected (not predicted), followed by follow through. If you have enough 'bottle' and money to burn go for it, on a lower time frame.
Disclaimers : This is not advice or encouragement to trade securities. No predictions and no guarantees supplied or implied. Heavy losses can be expected. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
China plummets as data shows patched recoveryAfter a 24% rally in their stock market from the start of July, the Shanghai Composite index saw a sharp reversal down 17% as data shows a patched recovery in China.
Bloomberg reporting industrial output was lower by 1.3% while retail sales plummeted 11.4%, showing strong weakness in the consumer, which use to be the backbone of many economies. Michelle Lam, China economist at Societe General SA in Hong Kong, stated that the recovery was “driven by credit stimulus as evident in the strong infrastructure and property investment, while the recovery in sales in retail sales and private investment has continued to lag.”
It is interesting to note that the strong infrastructure and property investment gains are on the back of the PBOC’s wary of cutting rates earlier in the year when the Coronavirus hits. In favour of a more direct approach, China issued bonds, facilitated direct lending and lowered the reserve ratio required for banks to provide liquidity into the money markets. These measures injected more than 1.7 Trillion Yuan ($220 Billion) of liquidity into the money markets. This is a stark contrast to how 38 other central banks around the world tackled the Coronavirus early this year by slashing interest rates. Michelle continues, stating that “Policymakers will probably save bullets and hold back broad-back easing and find the current growth trajectory acceptable.” This sentiment is backed by Ma Jun, a PBOC adviser, stating that “the PBOC doesn’t use all its bullets at once. China has plenty of room in monetary policy.”
China has been giving investors something to cling on to
The recent bull run has given many Chinese retail traders great euphoria. Bloomberg documented Min Hang, who opened her trading account, stating that “There is no way I can lose” and that “ feels invincible.” The rally added $1 Trillion of value in the span of 8 days, topping China’s equity market valuation to 10 trillion – the top of the bubble in 2015. However, being known as the world’s manufacturer, China continues upward hinges on the global economy to recover. Ding Shuang, chief economist for China and North Asia at Standard Chartered, stated that Coronavirus around the world continues to affect businesses around the world, which “may weaken demand for China’s goods and services and is the main risk facing China’s economy.”
This highlights a significant problem with Globalization: Dependency with all the other markets. Amid a trade war between China and the United States, Globalization faces an imminent threat akin to mutually assured destruction. With both countries’ interests in the forefront of their foreign policy, they are blinded to the fact that in this day in age their rely on each other more than they give each other credit for.
Are you riding China’s bull market?
CHN50 - SELLSo after last weeks better than expected results for the Chinese economy, the price broke out parabolically of its uptrend.
As you can see on the weekly TF, the price is currently at all-time highs and has twice previously been at this level and rejected. I expect there to be some selling pressure at this price point.
Always difficult to accurately predict the depth of the pullback, but back towards the top of the trend line seems like a decent target.
Look for reversal candles before entering the sell position.
All the best
