The markets today were crazy as always and brought me even more headaches, but at least significant levels were crossed today. What can I say, the Chinese and Hong Kong indices are like a honeypot of good reference material, and I have a serious sweet tooth. You readers seem like you like it as well, so thanks for making it even easier for me to feed by market data addiction! Besides China, we’re also seeing the USD/JPY going over 120, and large minute-to-minute volatilities after the ECB didn’t do anything and came out with classical European statement clarity (thus no clarity at all) and then the normal US market opening lifts turned it around 30 minutes later. Though China and Hong Kong stands out and have some good charts to go by.
Time for the normal laundry-list of data:
- Hang Seng Index:
- Spot high-low-close-return: 23 844 / 23 457 / 23 833 / +1.72%
- Futures-implied spot HLC: 23 990 / 23 418 / 23 841
- Turnover high again at HK$117.5 billion, but slightly down from yesterday’s HK$123.1 billion.
- Implied volatility from the VHSI down 0.6% to 16.31.
- Single-sided trading for spot simply going higher, then futures spiking after the futures market opened, then falling back to wards the spot close and oscillated around it for much of the evening.
- Hang Seng China Enterprises Index:
- Spot high-low-close-return: 11 494 / 11 094 / 11 481 / +3.80% (!)
- Futures-implied spot HLC: 11 642 / 11 103 / 11 509
- Turnover high again at HK$37.9 billion, up marginally from yesterday.
- Spot trading was very much one sided, which continued into the first hours of the futures trade, moderated and peaking before the ECB news, forcing the market down.
- Shanghai Composite:
- Spot high-low-close-return: 2 900 / 2 772 / 2 899 / +4.31% (!!)
- Shanghai A-Shares Top 50: HLCR: 9 540 / 9 000 / 9 530 / +5.90% (!!!)
- Turnover extremely high at RMB509.22 billion, but slightly down (!!!) from yesterday’s RMB529.78 billion.
- Shanghai – Hong Kong Stock Connect:
- Northbound quota balance use at RMB3.52 billion.
- Southbound quota balance use at RMB414 million.
- Stable through-day trading on both lings.
- Hong Kong Monetary Base:
- All quiet on the monetary base front… nothing of note to really report on here except for the closing aggregate balances going up to HK$239 199 millions (by HK$25 million).
Charts after the jump, and if you like any charts you will probably like these charts!
Hang Seng Index:
Down, up, down,, up… looks like a slightly upwards slanting bar code! Breaking the long-term Fibonacci was really important, and all these other levels have been crossed for the fourth time in a week now, so they are simply not that important. It will be interesting to see if the ability of Chinese market momentum to drag shares up will spread to the Hang Seng Index. Other than that there is not too much to go crazy over in the main market cap anchor in Hong Kong.
Hang Seng China Enterprises Index:
Top at 11 420 crossed, as was the trend going downwards, for the first time since 2011! Also, the Bollinger band sets up a lot surf potential since the 3-month SMA is turning around while the Bollinger bands are expanding. This is beautiful on the momentum setup, and requires a slightly longer-term to look at resistances going forwards:
We’re challenging the November 2013 peak, and testing the trend line between that peak and the February 2012 peak, but breaking higher and above the trend and triangle pattern is the most important feature on this chart, setting up challenges all the way up to 12 300 (January 2014 peak) level. The fact that all these breaks came in one day helps support the force of what really happened today in the HSCEI market, and shows that the traders are on one side of the boat in this market. Speaking of which…
Shanghai A-Shares Top 50:
We’re past the July 2011 high on the Shanghai A50! We didn’t even touch the bollinger band, it was simply a remarkable rally higher through and through. We’re now up 27% on this index in 10 days of trading! The turnovers this market are seeing speak for themselves, and there is very, very little in technical analysis now speaking for an unconsolidated break higher. From here on out, it’s either momentum waning that you’ll look into, “catch” on the Bollinger band (when it stops expanding and price is inside the bands, thus forcing the price lower as volatility decreases), or fundamentals that will be the name of the game. Throw your charts out and look at the fundamental prospects for China. I do think they look good, don’t get me wrong, but there’s a difference between normal good and “5% gains per day” good, that I think is big enough to fit an argument of excessive exuberance inside. I wouldn’t go short, but taking profits here and directing them towards the Hang Seng or the Hang Seng China Enterprises does seem a little bit better in terms of where there are gains to be collected.