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Right Now, In Hong Kong...
In our overnight market summary first thing morning, in which we noted that the Chinese bubble (shown most recently here) has finally spilled over into Hong Kong, we were dumbfounded by the move in the Hang Seng overnight, where as we reported previously, overnight there was "a blistering rally which rose nearly 4% on immense volume which at 250 billion Hong Kong dollars ($32 billion) was three times the average daily volume over the past year and nearly 20% more than the previous record volume day in October 2007, at the height of the pre-financial crisis bubble."
As it turns out that was nothing.
This is what has happened since then, in just the past hour, as the elementary school-educated Chinese momentum trading hoardes have descended.
No, that chart is fine, and nothing is wrong with your eyes: that was, indeed, until a few minutes ago, a 10% move in just the past two days!
This is how it looks longer term:
Some details from Bloomberg:
- Hang Seng Index’s 14-day relative-strength index rises to 87.2, highest since October 1993. RSI >70 signals to some traders shares are due to decline
- Turnover on Hang Seng Index ~400% higher than 30-day avg for this time of day
- Hang Seng Volatility Index surges 56%, set for biggest increase on record and heading for highest level since June 2012; two-day jump is 138%
- Hang Seng China Enterprises RSI climbs to 85.2, Shanghai Composite at 84
- 31 out of 40 Hang Seng China members had RSI >70 yday, most since Oct. 2007
- 20 Hang Seng China stocks at new 52-week highs yday, also most since Oct. 2007
Or, said far simpler, a stock bubble of epic proportions.
So sit back and enjoy, because at this point there are just two options: it continues rising parabolically, or it crashes. And since the Chinese stock market is now linked to Hong Kong, any crash here will first lead to a shake down in China, and - since global central bank liquidity is immediately fungible - a crash in China may well be the catalyst that take out the unprecedented global central bank liquidity bubble which has been reflating in virtually a straight line since 2008.
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Why do you spend every day of your lives sh*tting on rallies? Sad to watch.
there is nothing wrong with being bullish in a rising market. However, buying into a market that's gone parabolic is foolish. Have a look at the silver market when it went parabolic a few years ago, and you will understand.
All developed countries taking turns printing and buying stocks, why would it crash? "valuations" get redefined with every dollar printed
It was reported in the SCMP at the weekend that a couple of drunken mainland chinese students were caught shagging in public on a sidewalk in HK. The video went viral. I'm pretty sure that's what started the rally. Seems to be as good a reason as any.
Classy, no?
http://www.scmp.com/news/hong-kong/article/1754269/sex-street-hong-kong-...
Why isn't zerohedge showing the 25 year chart ? Join the ride to 40.000.
A $32 billion move? Sorry but that doesn't seem like a lot compared to the amount of money being thrown into these markets. Instead of seeing this move as the sign of a topping bubble, it could very well just be the sign of more CBs throwing fresh money into stocks. They have a lot of dry powder.
CLASSIC BLOW OFF TOP IN THE MAKING!
Watch for one more slightly higher high before Dorothy says bye bye to Kansas.
The Dollar has been dumping vs the Yuan and the Ruble since the start of this year. Probably you should keep your eyes on the real capital flows, and not the nonsense USD index, which is basicly the USD vs the Euro. Anything hitched to the Western central bank FOREX system "IS" the USD because all the CBs cooperate to set rates. If the Euro is dying, the USD is really dying, and so is the Western banking system.
The markets are inefficient and underpriced there. Thank gawd people finally recognized it and quickly got it to fair value.
Is there a -3x ETF for the Hang Seng?
I recently got out of FXI with a decent, modest profit. It really has hurt to see it go up so much since then.
However, I understand that the ChiComs are actually advertising the value of equity investments to their people, and are progressively unifying the Hong Kong and Shanghai exchanges. Maybe they noticed how well Goldman did on their shorts in 2008, and are deploying the same tactics on their own citizens and global investors.
10% up in two days is pretty tempting. I wonder how much it can go down in a couple of days?