Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18
More on that Gold and Silver Ratio 'Deviant Conundrum' - 13th Jun 18
Silver Shares? Nobody Cares - 13th Jun 18
What Happens to Stocks, Forex, Commodities, and Bonds When the Fed Hikes Rates - 13th Jun 18
Gold and Silver Price Setting Up for A Sleeper Breakout - 13th Jun 18
Tesla Stock Analysis - 12th Jun 18
What Happens Next to Stocks when Russell Goes up 6 Weeks in a Row - 12th Jun 18
Gold vs. Stocks: Ratios Do Not Imply Correlation - 12th Jun 18
Silver’s Not-so-subtle Outperformance - 12th Jun 18
Why You Should Brace Yourself for Big Financial Changes - 11th Jun 18
Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts - 11th Jun 18
Stock Market Topping Pattern or Just Consolidation? - 11th Jun 18
Study: What Happens Next to Stocks When the Put/Call Ratio is Very Low - 11th Jun 18
G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - 11th Jun 18
SPX Unshackled - 11th Jun 18
When Trump Met Fibonacci And Won - 11th Jun 18
FREE Theme Park Entry with Cadbury's Choc's! Legoland, Alton Towers, Chessington.... - 11th Jun 18
Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - 10th Jun 18
End of the World Stock Market Chart! - 10th Jun 18
All US Homes Are Overvalued - 10th Jun 18
Thorpe Theme Park London Car Park Exit Nightmare - Drivers Beware! - 10th Jun 18
Gold Price Summer Doldrums - 9th Jun 18
How to Prepare for Economic Uncertainty with Gold and Silver - 9th Jun 18
5 "Tells" that the Stock Markets Are About to Reverse - 9th Jun 18
Billionaire Schools Teacher in NAFTA Trade Talks - 9th Jun 18
Land Rover Discovery Sport ECO Mode Real World Driving MPG Fuel Economy - 9th Jun 18
Crude Oil Bullish Weekly Reversal vs. Bearish Monthly Reversal - 8th Jun 18
Fed’s Interest Rate Hike is Short term Bearish for Stocks - 8th Jun 18
The Deviant Conundrum Called Silver - 8th Jun 18
Pleasure Island Theme Park Cleethorpes, Last Day Trip Before it Closed Down - 8th Jun 18
America’s One-sided Domestic Financial War - 8th Jun 18
Debt Consolidation Advice: When and Why to Consolidate - 8th Jun 18
Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - 8th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

China Mega-trend Stocks Stealth Bull Market Update, SSEC Up 47%

Stock-Markets / Chinese Stock Market Jun 28, 2009 - 01:37 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleWhilst many readers have benefited from my series of analysis on the stocks stealth bull market of the past 4 months on the western markets. However, back at the start of September 2008 I gave the first of a series of accumulating buy signals on a major world market which was for China at SSEC 2,000 or lower, which had followed a year of bearish analysis as of October 2007 at above SSEC 6,000 and therefore subsequently reflected up on accumulating into a meg-trend at less than 1/3rd the level of a year earlier.


Since the stated accumulation level of 2,000 on the SSEC the market has risen to 2,940 which represents a gain of 47% in less than 9 months. Whilst many 'perma-bears' continue to correctly point to the collapse in world trade i.e. exports down 40%, imports down 25%. However the performance of the chinese economy and stock market shows that China has offset the collapse in world trade by means of a huge stimulus package of $600 billion so as to prevent a downward economic spiral from taking hold.

Those that continue to be negative on China's prospects due to the crash in exports, FAIL TO RECOGNISE THE FACT that China is sitting on more than $2 trillion of reserves that despite the economic crisis continues to grow by $400 billion per year. Therefore the $600 billion stimulus whilst huge by western standards is NOT FINANCED by debt but by CASH-FLOW, which is the fatal mistake countries such as Britain are making, i.e. borrowing for consumption.

Now that China has gotten a taste for spending spree's, imagine a China that can sustain annual economic growth rates of at least 7% and more probably averaging more than 10% per annum for the next TEN YEARS! ALL on the basis of a STRONG annual cash-flow taking up the slack whenever there is a blip in the global economy. This implies that the outlook for Chinese stocks remains immensely attractive even after the 47% run up, which implies that it can no longer be really called a stealth bull market, but rather a bull market proper that investors should take seriously note of.

The economic stimulus package AND communist party dictats such as ordering state and private factories that produced goods for exports to now produce goods for domestic consumption, and illustrated by the THREE NO's policy ensures that the global recession does NOT impact on Chinese consumers who in fact have been given the green light to embrace consumption.

  • No Redundancies
  • No delays in salary payments
  • No Salary Cuts

Chinese statistics imply a successful bounce back in the economy which is now projected to grow by 10% this year. Off course, as with all governments the official statistics are not 100% accurate, but still we are looking at Chinese growth for 2009 of at least 7%, with an increasing shift away from the export model to a consumer model ensuring that the chinese long-term mega-trend has many years to run and therefore those that accumulated during the global crisis look set to reap continuing huge rewards especially on an exchange rate adjusted basis.

Asian Stealth Stocks Bull Markets

China forms part of an Asian Axis of Growth that has seen stock markets soar right across the region across all of the major players from the developing Indian market up 100%, to the more developed South Korean market up 60%. To make sure you do not miss out on the asian stocks bull markets see the ten page in-depth report.

China Economy to Boost World Trade and Commerce

As China becomes a larger consumer market than this will benefit manufacturing and service industries across the world as the Chinese ports will increasingly see more and more import traffic and so China's continuing boom will in fact lift western stock markets along with it. For example imagine a Chinese middle class of over 300 million holidaying abroad, imagine the tourism boost to holiday destinations of Europe and America and elsewhere and you begin to get a taste of what the chinese mega-trend has to offer the world as 20 years of exports gradually gives way to the next 20 years of imports, with the established trade routes and links specifically benefiting i.e. Europe, USA, Hong Kong, Asia and Japan as the major beneficiaries of China trade and investments.

Apart from the strong outlook of domestic sectors right across the board such as construction, retail and technology, the China factor impacts on the other global mega-trends that remain as oft mentioned over the past 9 months of the energy sector, agricultural commodities and tek stocks as well as numerous other China growth impacted sectors such as tourism mentioned earlier.

I continue to view ANY sell-off in Chinese stocks due to seasonal factors as a further opportunity to accumulate more in an economy that has far more sound fundamentals than many other countries especially those in the west that are sitting on soon to be exploding debt time bombs with all of the associated consequences of lagging economic growth and thus under performance of stock prices.

Your China-centric mega-trends INVESTING analyst.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Nadeem from Bud
12 Jul 09, 06:49
China SSEC 000001

Hello.

It is now July 12.

Your positive investment view of Mainland China

is interesting to me. Reaching 3140 on July 10th.

It appears, the upside momentum is weakening.

Correct me, the last EWI GMP released in April 09

pointed to a Wave coount if and A wave low in Oct 08.

Does this not suggest a corrective advance to current

levels ?

Ok. I understand your Bullish several weeks ago.

Have your views changed?

Last how can I enlist, receiving your updates directly

to my email.

Thank You.

Bud Fox


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules