What is it going to be like for 2nd half of 2023 ?
I am getting more enquiries from my followers and friends about investing in China. Mostly, the vibes are negative - from a slump housing challenge to the ongoing never ending US- China relationships to the unpredictable CCP clamping on its own economy.
Looking at the weekly chart, let's be objective and see what the direction will be. SPX500 is coming close to its previous high on 3 Jan 2022 at 4820. We are now at 4478 price level. It is highly likely that this goal can be achieved in the coming weeks based on current bullish trend.
However, once it revisit the resistance level at 4820, there lies a possibility of a pattern reversal. Of course, I hope it is a normal pull back before another strong rally meaning a breakout of the resistance level. That really depends on the FEDs if they are going to issue one last interest rate hike or start tapering the market.
It could go sideways for a while before the year ends where the market tends to get bullish again with the forthcoming Christmas and year end celebrations (retail sales soaring with more people buying gifts and traveling boosting consumption). Until the line is broken up or goes sideways or even pullback, there is nothing much to do except making your own wild guesses.
China on the other hand is more interesting ! We see the end of the long bearish trend recently on 24 Jul 2023. With the government making its commitment to shore up its economy especially the property market, I am getting more certain that the market has bottomed now (31 Oct 2022). Consumer confidence which is lacking at the moment will take some time to recover. The government stop short of offering previous bazooka like stimulus will be offering incentives in other ways to help its people.
Are we not seeing more Alibaba news lately ? The last fine to Ant Group could spell the end of punishment to Alibaba Group before we see an IPO launch hopefully sooner than later (most probably 2024).
The fact remains that many of the listed property developers from Country Gardens to Heng Da are in the red , owing billions of dollars to its creditors. I have said before for a sector that contributes 20% to the economy, it is highly unlikely that the government will not interfere and offer help, however reluctant they may be. Property downfall will lead to bad loans in the banks and cause the construction activities to go stagnant and the whole supply chains from steel, other raw materials will also be affected. The collateral damage is way too much for the government. The emphasis will be on Electric Vehicles, Household appliances, Digital economy, etc as highlighted in their papers recently.
HSI, as a proxy of the China stock market is witnessing buying support at 18,000 to 19,000 price level since May this year. The breakout of the resistance level at 20,814 could be the litmus test for its continuing bullish trend else we can continue to see more sideway movements.
So for the US market, I will be selective about the companies that I want to invest (eg Paypal) and wait for the resistance to be break up before deciding the next course of action.
China is offering a good risk/reward ratio as I expect more specific measures from the government in the coming weeks to announce how it is going to help its economy, boost job and all. When people made profits from the stock market, they are going to take the money and spend, boosting consumer confidence, increasing demand of goods and services, something that the government would want to see. The way I look at it, the property sector has scarred quite a lot of people with their mortgages tied down, the chances of investing in the market will be slimmer (except those with excess cash or speculators hoping for a rebound soon). That means the next money making opportunity lies with the stock market.
Thus, things are getting exciting and the market will always offers us the investors opportunities after opportunities if you do pay attention to it. No need to bet your life against time with the hourly chart and hoping it goes the direction you want (unless you are really skilled and have a strong heart). Quoting the words of President Xi - he said the property market is for living and not speculation. Similarly, imo, the stock market is for investing and not for speculation.
All the best to everyone!
I am getting more enquiries from my followers and friends about investing in China. Mostly, the vibes are negative - from a slump housing challenge to the ongoing never ending US- China relationships to the unpredictable CCP clamping on its own economy.
Looking at the weekly chart, let's be objective and see what the direction will be. SPX500 is coming close to its previous high on 3 Jan 2022 at 4820. We are now at 4478 price level. It is highly likely that this goal can be achieved in the coming weeks based on current bullish trend.
However, once it revisit the resistance level at 4820, there lies a possibility of a pattern reversal. Of course, I hope it is a normal pull back before another strong rally meaning a breakout of the resistance level. That really depends on the FEDs if they are going to issue one last interest rate hike or start tapering the market.
It could go sideways for a while before the year ends where the market tends to get bullish again with the forthcoming Christmas and year end celebrations (retail sales soaring with more people buying gifts and traveling boosting consumption). Until the line is broken up or goes sideways or even pullback, there is nothing much to do except making your own wild guesses.
China on the other hand is more interesting ! We see the end of the long bearish trend recently on 24 Jul 2023. With the government making its commitment to shore up its economy especially the property market, I am getting more certain that the market has bottomed now (31 Oct 2022). Consumer confidence which is lacking at the moment will take some time to recover. The government stop short of offering previous bazooka like stimulus will be offering incentives in other ways to help its people.
Are we not seeing more Alibaba news lately ? The last fine to Ant Group could spell the end of punishment to Alibaba Group before we see an IPO launch hopefully sooner than later (most probably 2024).
The fact remains that many of the listed property developers from Country Gardens to Heng Da are in the red , owing billions of dollars to its creditors. I have said before for a sector that contributes 20% to the economy, it is highly unlikely that the government will not interfere and offer help, however reluctant they may be. Property downfall will lead to bad loans in the banks and cause the construction activities to go stagnant and the whole supply chains from steel, other raw materials will also be affected. The collateral damage is way too much for the government. The emphasis will be on Electric Vehicles, Household appliances, Digital economy, etc as highlighted in their papers recently.
HSI, as a proxy of the China stock market is witnessing buying support at 18,000 to 19,000 price level since May this year. The breakout of the resistance level at 20,814 could be the litmus test for its continuing bullish trend else we can continue to see more sideway movements.
So for the US market, I will be selective about the companies that I want to invest (eg Paypal) and wait for the resistance to be break up before deciding the next course of action.
China is offering a good risk/reward ratio as I expect more specific measures from the government in the coming weeks to announce how it is going to help its economy, boost job and all. When people made profits from the stock market, they are going to take the money and spend, boosting consumer confidence, increasing demand of goods and services, something that the government would want to see. The way I look at it, the property sector has scarred quite a lot of people with their mortgages tied down, the chances of investing in the market will be slimmer (except those with excess cash or speculators hoping for a rebound soon). That means the next money making opportunity lies with the stock market.
Thus, things are getting exciting and the market will always offers us the investors opportunities after opportunities if you do pay attention to it. No need to bet your life against time with the hourly chart and hoping it goes the direction you want (unless you are really skilled and have a strong heart). Quoting the words of President Xi - he said the property market is for living and not speculation. Similarly, imo, the stock market is for investing and not for speculation.
All the best to everyone!
Comment:
www.shine.cn/news/nation/2308103302/