2023 Market Sentiment & Positioning

[aurvandil]

China stocks resume downtrend, lol
If you have no other problems in life and life is good, please go and buy China stocks to find a reason to worry in life

I don't think China stocks will go down very much from here. Taking BABA as an example, maybe 20 years later it will still be trading at 80.

 

[xiaonajia]

I don't think China stocks will go down very much from here. Taking BABA as an example, maybe 20 years later it will still be trading at 80.

I heard many edmw say sell in may, how's the futures price action on Monday? Able to give overview of how strong the auction is and ur opinion for the next month?

And what's up with 4350? Why is it a key level?

 

[aurvandil]

I heard many edmw say sell in may, how's the futures price action on Monday? Able to give overview of how strong the auction is and ur opinion for the next month?

And what's up with 4350? Why is it a key level?

Market looks bullish until the next major macro risk event which is NFP followed by CPI. The only thing holding back the market is the debt ceiling and how much of a fiscal drag the deal will bring. Once that gets cleared, expectation is for a relief rally further up powered by the unwinding of hedges.

On why 4350 is important, market tends to have memory and retest previous levels which failed. The market tried and failed many times at the 4200 level. Now that it has been broken, we are in relatively untested territory as the auction of price levels above 4200 occurred too long ago to give a good read of the current order flow.

In this untested area, the only landmark of note is the 4350 which the market tested and failed way back in Aug 22. My expectation is for the market to head towards and test that level.

 

[revhappy]

I don't think China stocks will go down very much from here. Taking BABA as an example, maybe 20 years later it will still be trading at 80.

Baba is a bit of battleground stock. I wonder what about Kweichow Moutai, CATL etc?

 

[aurvandil]

Baba is a bit of battleground stock. I wonder what about Kweichow Moutai, CATL etc?

If Baba cannot break out, what are the chances for these stocks?

 

[rider83]

Usually May is a weak month but so far, it has been a rather boring month than weak. Feels like somehow funds are persuaded not to sell

 

[rider83]

Even if yesterday was red day, I feel like it's a small pullback before the squeeze, esp once debt ceiling resolved

Boring? This may looks like bullish wor

Looks bullish? Betting on debt ceiling that will go through?

Debt ceiling is just a drama. And everyone expects the debt ceiling to be raised eventually hence market is boring right now.

 

[paladin]

I heard China bought a lot of US Treasury bills and bonds recently, that's why the yuan depreciated and the USD rose recently, because of the multi-billion dollar currency exchange.

If US defaults, the USD will sink and bond interest rates will spike further? To factor in the risk of default? if US bond rate increase, stock market index will decrease. Can see a 20% drop in stock market if US defaults.

 

[stanlawj]

China stocks resume downtrend, lol
If you have no other problems in life and life is good, please go and buy China stocks to find a reason to worry in life

I just bit the bullet and bought into 2 China funds:
1) FSSA Regional China fund
2) JPM China A share opportunities fund

I bought via endowus and put 50k in each fund. Kind of an experiment as China bottomed last Oct and then it jumped with the reopening story and now has cooled down a bit.

I've been observing China stocks for quite sometime. The CNH currency is sort of a leading indicator of the China-economy stocks. Also the A-shares value is heavily distorted by CNH currency weakness.

Best time to buy is when the CNH starts to bottom and strengthens against USD.
Best time to sell when CNH peaks and then drops suddenly.
The lead time is about only a few days.

CNH right now is weakening, and has yet to bottom, and the China-economy stocks are all dropping as well. Good correlation there, still holding. Useful for timing the bottoms.

There are times the correlation doesn't hold, but at those times, the China-economy stocks already peaked out very obviously.

I'm now waiting for the CNH currency to stop its slide against the USD and show some strength first.

An explanation for the current correlation is that the manufacturing sector is heavily export dependent and now suffering as the major export markets are all in recession (US, EU) for goods spendings (except aeroplanes). Services sectors in US and EU are not in recession, but they do not require China's exports. And China does not produce much aeroplane stuff (for Boeing and Airbus).

The deflation in factory worker wages and property bust are both now affecting consumption mindset by changing it into a saving mindset for future crisis. So cash is hoarded instead of spent.

 

[elvintay07]

No boring one. In between will have a lot of saga that can be created. Let’s say ur company decided to cut everyone’s pay by 10%, then u spread the rumours of massive retrenchment to strike fear. Then later you tell everyone there will be no retirement but cut pay by 20%. All will kneel down and thank you.

US will drag and drag and maybe act act till nearly default before both sides give way and raise the ceiling. If no saga, then wait for the saga to happen. Some ppl are always too impatient. No action just go holiday or lobo and wait for action to happen:

Looks bullish? Betting on debt ceiling that will go through?

Debt ceiling is just a drama. And everyone expects the debt ceiling to be raised eventually hence market is boring right now.

 

[MrHighlander]

China/HK shares really regret buying

no eyes see

 

[zeroX26]

China/HK shares really regret buying

no eyes see

Today drop again? BABA $80 suppork still holding?

 

[churnmaster]

US 1-month treasury yielding almost 6% pa now . .

 

[stanlawj]

China/HK shares really regret buying

no eyes see

Buy low, sell high? Right?
Buy low right?

 

[Flare]

super red day haiz

 

[revhappy]

A share and CSI300 is not down that much HSI index has become like a meme stock. They really screwed up that index with the rebalancing.

 

[stanlawj]

Thank goodness China is crashing. This keeps a lid on oil price. Which prevents inflation. Which stops the central banks from hiking any further.

Which sets the stage for the next bull run (which according to some, has already started since Oct 2022).

 

[aurvandil]

Thank goodness China is crashing.

China's real estate problem has escalated to negative equity / foreclosure level.

 

[stanlawj]

China's real estate problem has escalated to negative equity / foreclosure level.

Doesn't matter. Are you happy oil price is now not $100/bbl?

So far only sugar is breaking new high.

 

[aurvandil]

Doesn't matter. Are you happy oil price is now not $100/bbl?

So far only sugar is breaking new high.

I only trade the S&P so I tend to watch things from the perspective of how US equity would be affected.

For a while, it looked like the China equities could develop to become a serious rival to the US. The same could be said of Japan when Japan was then the emerging rival. When Japan entered into its long stagnation after the real estate bubble burst, Japanese equity became largely irrelevant. If China enters into a similar long stagnation, then Chinese equity would likely become similarly irrelevant.