Category: China & HK

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India, Singapore and China

India’s Sensex index retraced to test the new support level at 17500. The primary trend remains downward but respect of support at 17500 would confirm a rally to the descending trendline. Bullish divergence followed by a cross to above zero on 13-week Twiggs Money Flow indicates buying support.

BSE SENSEX Index

* Target calculation: 17 + ( 17 – 16 ) = 18

The Singapore Straits Times Index is testing the band of resistance at 2900/2950. Respect would indicate another test of primary support at 2500, while breakout would offer a target of 3300*.  63-Day Twiggs Momentum below zero indicates that the index is still in a primary down-trend.
Singapore Straits Times Index

* Target calculation: 2900 +( 2900 – 2500 ) = 3300

Dow Jones Shanghai Index is advancing to resistance at 330 and the descending trendline. Respect would indicate another primary decline, with a target of 250*, while breakout would signal that a bottom is forming.

DJ Shanghai Index

* Target calculation: 290 – ( 330 – 290 ) = 250

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China’s leading indicators head south – macrobusiness.com.au

Take a look at the [Chinese] Leading Index’s sharp deterioration recently – there has been a clear and material deterioration in the leading index over the past couple of months. This suggests to us a substantial further fall in Chinese GDP. The last release of a week or so ago showed Chinese GDP growing at 9.1% against expectations of 9.1%. This leading index to us suggests that this growth rate will fall to 8% which is getting dangerously close to the “hard landing” territory.

via China’s leading indicators head south – macrobusiness.com.au | macrobusiness.com.au.

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Economist Editor: 2012 is going to be pretty sluggish

Economist Editor: 2012 is going to be pretty sluggish — with risk of “self-induced” stagnation

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China will not ease up on realty – macrobusiness.com.au

Although there has been some noise about easing real estate curbs amid recent aggressive price cutting and subsequent protests, Li Daokui’s [academic advisor and member of the monetary policy committee of the People’s Bank of China] view is consistent with Premier Wen Jiabao’s view that curbs will be remain in place. He believes that economic growth will slow, and the growth model which relies on real estate development will end.

He added that inflation in China will probably fall from about 5.5% for this year to just 2.8% next year…..

via China will not ease up on realty – macrobusiness.com.au | macrobusiness.com.au.

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Hong Kong and China

HongKong’s Hang Seng Index broke its secondary descending trendline at 19000, indicating a test of the primary trendline at 21000/22000.

Hang Seng Index

* Target calculation: 19 + ( 19 – 16 ) = 22

The Shanghai Composite Index recovered above support at 2350. Breakout above its secondary trendline would also test the primary trendline around 2900.

Shanghai Composite Index

Dow Jones HongKong Index shows retracement to test short-term support on Monday. Respect of the rising trendline would signal trend strength, while failure of support at 360 would signal another decline.

Dow Jones HongKong Index

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After China, Fund Chief Goes to Japan – WSJ.com

On Friday, Chinese and European officials sought to play down expectations about when and how China may deploy its vast financial resources to help bail out indebted countries in Europe.

A Chinese Vice Finance Minister said China must first see the details of a new European bailout fund before making any commitments. “We of course must wait until its structure is extremely clear,” Zhu Guangyao told a press briefing. “And moreover, this investment must be decided on after serious, technical discussions.”

Mr. Regling told reporters he doesn’t expect “any precise outcome” from his visit to China and said “it’s too early to say what kind of amounts might be envisioned.”

…..Mr. Regling dismissed suggestions that European leaders will be forced to offer concessions to China in return for investment. “I am not here to discuss concessions,” he said, noting that China already buys EFSF bonds and gets no special considerations.

via After China, Fund Chief Goes to Japan – WSJ.com.

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China spoils the party – macrobusiness.com.au

From the FT:

Chinese metals companies, lynchpins in the global economy, are warning that Beijing’s monetary tightening has gone too far, causing domestic customers to delay orders and raising the risk of payment default.

In one of the clearest signs yet of deteriorating sentiment, Baosteel, China’s second-largest steel producer, has told the Financial Times that its customers were pushing back scheduled deliveries “due to declining economic growth and tightening credit”.

via China spoils the party – macrobusiness.com.au | macrobusiness.com.au.

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Here’s What Will Happen When China’s Bubble Bursts

What would a China slowdown mean for the rest of us? In the main, three things will become evident.

  • First, China will remain committed to letting its currency, the yuan, rise in international foreign-exchange markets. A stronger currency will encourage companies to rely less on exports and more on goods and services consumed domestically.
  • Second, Chinese products will no longer be the cheapest on the shelves in years to come because China’s inflation rate will rise along with its wages. This is natural when any nation climbs a rung on the development ladder, which is what China is now doing.
  • Third, the Chinese market for raw materials and heavy equipment—cranes, bulldozers, factory machinery—will slow….

via Here’s What Will Happen When China’s Bubble Bursts.

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Asia monthly charts

Monthly charts help fit the current market action into a long-term perspective. The Nikkei 225 index broke support at 9000 and is likely to test the 2009 low of 7000*. 63-Day Twiggs Momentum respecting the zero line (from below) confirms the primary down-trend.

Nikkei 225 Index

* Target calculation: 9000 – ( 11000 – 9000 ) = 7000

The Seoul Composite found (primary) support at 1650/1700, followed by a reaction to 1900. Declining 13-week Twiggs Money Flow warns of selling pressure. Respect of resistance at 1900 is likely, which would indicate another test of primary support.

Seoul Composite Index

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

The Shanghai Composite index is testing support at 2400. Failure would confirm the strong primary down-trend signaled by declining 63-day Twiggs Momentum.

Shanghai Composite Index

* Target calculation: 2500 – ( 3500 – 2500 ) = 1500

The Hang Seng index is retracing to test resistance at 20000. Declining 13-week Twiggs Money Flow warns of selling pressure. Respect of resistance, would indicate another test of 16000.

Hang Seng Index

* Target calculation: 16 – ( 20 – 16 ) = 12

India’s SENSEX is headed for a test of resistance at 17500/18000 after a small bullish divergence on 13-week Twiggs Money Flow indicated buying pressure. Respect of 18000 would warn of another test of 16000.

SENSEX Index

* Target calculation: 16 – ( 18 – 16 ) = 14

Singapore’s Straits Times Index is in a similar position. Respect of resistance at 2900 would signal another test of 2500. Failure of support would confirm the strong primary down-trend signaled by declining 63-day Twiggs Momentum.

Singapore Straits Times Index

* Target calculation: 2500 – ( 2900 – 2500 ) = 2100

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