China Stock Market vs Nasdaq 2000

Big Charts ^

[Travis McGee]

Yes indeed. The china bubble is set to pop, and their population has no experience with this phenomenon. 100s of millions of Chinese went into debt to put their borrowed money into “sure bets” in the Chinese real estate and stock markets. Already, Chinese factories are backing up with unsold merchandise, as the American economy slows. The question now is only when will their crash occur, and what will it do to global finance?

[Travis McGee]

Yes, our economy is rock solid. We have nothing to worry about. (The current ratio is off of this chart, up to about 350.)

"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market and so check the movement."

---Harvard Economic Society, October 19, 1929

“Several brokerage houses tumbled; blue-sky investment companies formed during the happy bull market days went to smash, disclosing miserable tales of rascality; over a thousand banks caved in during 1930, as a result of marking down both of real estate and of securities; and in December occurred the largest bank failure in American financial history, the fall of the ill-named Bank of the United States in New York.”

~~Only Yesterday: An Informal History of the 1920’s by Fredrick Lewis Allen

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

~~Ludwig von Mises

"I am one of those who do not believe the national debt is a national blessing... it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."

~~Andrew Jackson, letter, April 26, 1824

The bank mania is raising up a moneyed aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding. These have taken deep root in the hearts of that class from which our legislators are drawn, and the sop to Cerberus from fable has become history. Their principles lay hold of the good, their pelf of the bad, and thus those whom the Constitution had placed as guards to its portals, are sophisticated or suborned from their duties.

~~Thomas Jefferson to Dr. J. B. Stuart, 1817

Like a dropsical man calling out for water, water, our deluded citizens are clamoring for more banks, more banks. The American mind is now in that state of fever which the world has so often seen in the history of other nations. We are under the bank bubble, as England was under the South Sea bubble, France under the Mississippi bubble, and as every nation is liable to be, under whatever bubble, design or delusion may puff up in moments when off their guard.

~~Thomas Jefferson to Charles Yancey, 1816

The crisis of the abuses of banking is arrived. The banks have pronounced their own sentence of death. Between two and three hundred millions of dollars of their promissory notes are in the hands of the people, for solid produce and property sold, and they formally declare they will not pay them. This is an act of bankruptcy, of course, and will be so pronounced by any court before which it shall be brought. But cui bono? The laws can only uncover their insolvency, by opening to its suitors their empty vaults. Thus by the dupery of our citizens, and tame acquiescence of our legislators, the nation is plundered of two or three hundred millions of dollars, treble the amount of debt contracted in the Revolutionary war, and which, instead of redeeming our liberty, has been expended on sumptuous houses, carriages, and dinners. A fearful tax! if equalized on all; but overwhelming and convulsive by its partial fall. Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burthen all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs. Prudent men must be on their guard in this game of Robin's alive, and take care that the spark does not extinguish in their hands. I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jack-lantern wealth, that they will not stop short of its total and fatal explosion.

~~Thomas Jefferson to Dr. Thomas Cooper, 1814

[Travis McGee]

A year ago, our perma-touts were swearing that real estate was fundamentally very sound, and there would be no serious downturn.

Now, they want us to forget that chapter as they fall back to the next trench, and tell us that the financials are basically sound. “Buying opportunity” etc.

[headsonpikes]

Thanks for the wonderful timely quotes.

As many posters know, I’m a speculator on Canada’s Venture Exchange. The Exchange is mining exploration focussed, as is my portfolio. However, there are also junior technology and other businesses on the TSX-V.

Here’s a China play worth checking out, IMHO.

http://www.stockta.com/cgi-bin/analysis.pl?symb=SMS.C&num1=7&cobrand=&mode=stock

If you think the China bubble can keep bubbling, this could be a winner.

Disclosure: the recent run-up has made this stock the largest single position in my portfolio - it is already a triple+ for me, and I have taken cash off the table.(not really off the table - I just shoved it into another junior miner!)

[Always Right]

I think the correction is well under way right now. If the Chinese market indeed follows the example, we’ll see support of the index at 155, rally back to about 190, then in about 9 months down to about 60. Just using the same math from the Nasdaq, and the time periods too.

China needed a correction. But I still don't see it headed that low. Your 155 number is probably about right, although I could see it touch 150. I just don't see a dot.com like situation in China. I see real companies, making real profits and having real growth. It went up too fast and is now taking a breather. It would take a world wide economic crash to take FXI down to 60, and I just don't think things are that bad. Possible, but I think we will get through this with just a mild recession. BTW, the Chinese oil stocks, PTR and CEO were overvalued by about 100% (which make up about 10% of FXI portfolio).

[RightWhale]

Asian markets seem to follow Wall Street. Today the DJIA reached 12,800, which is some kind of magic trapdoor through which it will plummet forever.

[jwh_Denver]

Triple top.

[bruinbirdman]

"Triple top"

NYSE. Any significance?

yitbos

[jwh_Denver]

“Any significance?”

Good question. You’re making me think. Right now the only thing I can say tech wise is that the more times a resistance area is hit the weaker it becomes. Usually on the 4th try it will go through resistance and then that area becomes support.

But as far as a harbinger of things to come? I don’t know. Right now with the markets dealing with this subprime mess it’s not likely to test that resistance area for a long time. JMHO.

[bruinbirdman]

Well, I guess "double top" mana is kaput. Triple top is only harbinger of quadroople top which is meaningless.

Guess what that says about technicians? Support? 50 day average? 200? Sector? S&P, DJ, NYSE, NASDAQ, CAC, DAX, NYMEX?

yitbos

[jwh_Denver]

In my years of trading I can boil it down to finding a bullish sector, whatever it is, and buying what I believe will be the best percentage performing stock(s) in it. If they are not the best percentage performers move the money to those that are.

I then look to see how long the sector will stay bullish and I will know when the sector turns bearish. Simple trendlines will tell me this.

A stock should run on fundamentals but sometimes market sentiment takes it’s place and that will give big clues on where the stock is going short to intermediate term. I then use TA to determine when to sell into strength and buy into weakness. The best buys and sells seem to be the most painful to do. This is the contrarian factor which is a very viable tool to make money or not lose money.

I do keep a “core” (50%) position in the stock assuming I believe the stock is due for, or showing, a downturn is happening or expected soon.

I believe that TA covers support/resistance whether they are trendlines or moving averages or seemingly random prices on the chart. I also believe a knowledge of TA is essential because there are so many traders that use it and not knowing it presents a disadvantage.

[bruinbirdman]

"In my years of trading . . ."

Then again, some knowledgeable long term investors are ahead of any index over the last 30 years.

yitbos

[jwh_Denver]

318% up as of today in 4 1/2 years and the juicy part of the season is yet to come. I’m sorry my good intentions could not get past your arrogance.

[Professional]

Again, I’d like to ask you WHY you think it is meaningless? The concept of technical analysis, is that chart patterns follow psychological patterns, especially in extreme cases. Why do you say they are meaningless? Or can you not answer the question?

[Professional]

Excellent quotes. You are basically showing that mania and stupidity are a timeless thing, and that people don’t bother to learn from the past. Great stuff.

[Professional]

Interesting. I remember those days, people simply were throwing in the towel not to loss, but to gain. They simple decided that the bubble was not a bubble, but a sustainable uptrend. And that is the classic last moments of a bubble, and why in many cases technical analysis works. It creates a visual of the mania, no different than the visual of a bridge that is washed out.

[Professional]

So, you admit, your just playing the bubble, but you of course being smarter than everyone else, will get out before they all do? How many times you think people have thought that? Wake up, for your own sake. Right now you’re following the lemmings, saying your the sole lemming that will not jump off the cliff.

[Professional]

“real companies, making real profits and having real growth”

Is msft a real company, making real profits, having real growth? So, are you saying that stock could not fall by 65% in value, that was a mistake? Not just Microsoft, but csco, intc, orcl, ge, mcd, ko, dis, t, vz, pfe, bmy, twx.....

A real company, when the stock disconnects from reality, can most certainly fall,by 60-70%, or more. I’d be happy to cite 100 or more examples in various time periods, that did just that.

[Professional]

Nail on the head...

[bruinbirdman]

"I’m sorry "

Come on. Somebody said a double top was one of the best signs ("mana").

I showed one, in Nov, '07, on the NYSE and it was dismissed with some gobleydegook about triple tops.

I believe my comments were about techys.

Anonymous posters at FR should only take something personally if it comes from JR.

yitbos