It’s coming back, week by week, yuan by yuan. Not sure if we’ll have farmers back at street stalls hawking both fresh greens and trading ideas but I do see a return of this market, just as surely as some of that animal spirit revival has found its way in bitcoin and public company merger deals left and right. It’ll be over when we have dozens of ETFs for a variety of SSEC components/constituents but that might be a long way off.
Shanghai and Shenzhen both figure in a theme I think will unfold over the coming months, “PARIAHS ON PARADE”. These pariahs will be hated “S” tickers/ideas, all of which are working out bottoms, ready to climb higher over a rocky terrain dotted with skepticism and cynicism. We covered Sugar. We covered the “Soviets” via Sberbank. And now today’s it’s Shanghai/Shenzhen. Last on the list will likely be South America (via already resurgent plays such as those found in Argentina and Brazil, but we’ll get to that in the next day’s post). By week’s end/weekend, I want to recap and discuss these “S” trades, that have all been hated and reviled and pushed into the earth. Seeds of indifference by burned traders/investors planted are now ready to bloom and perhaps surprise.
Below is $SSEC $DJSZ and a personal bias favorite, $TCEHY but there are many. These are weekly charts but it’s enough to encourage. You will laugh and laugh at me. I just need more price action and an arbitrary derivative like ADX and RSI to help encourage. Once the appointed hour has arrived, it’s time to light the fires and meet you at the ramparts. Once that moment is in the readiness, be ready to take profits from short-selling running dogs who can’t fathom that ghost cities could one day be crowded shoulder to shoulder, filled with the families of second and third born children, with their own kids in tow, shopping at knock-off mega-malls designed to mimic 21st century “Fast Times at Ridgemont High”.
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