HSI continues to rise, even though the total volume is still below HK$50 billion and it is only a meagre 76 points.
What it seems like is that HSI is getting pulled higher every morning by markets in Europe and in the US. After this pull up, there was just little interest in buying or selling shares.
With the HSI up seven days in a row, statistically speaking, there should be a high chance for the index to go down.
I don’t have much insight to today’s market. Most likley there is some pull back after yesterday’s big jump. The China economic data are not creating much impact on the indices today (The Shanghai indicies didn’t drop at all). There may be some movement in the afternoon because of the land sale in Tung Chung. Other than that, today will be a quiet day.
Bought some bull certs again and aimed to get out intra-day with a few points of gain.
Good news from Europe this morning. The ECB and the financial ministers finally have come up with something more concrete. Their much-swifter action over this weekend to give something concrete to the public before Asia opens is definitely something that tells people that they are finally getting their acts together to defend the Euro. A big contrast to the past few months where leaders were not too enthusiastic in helping Greece and the PIIGS out given the leaders’ political implications in their home countries. Strong confidence boost to the stock market!
As I said in the comments to my last post, I believe the market will go up today (at least this morning). No analyst / strategist should come up with any negative report at least until morning in Europe so it is guaranteed that there will be a few hours of good time.
Strategy to profit:
Just bought a few bull certs and hopefully it will up a few points and then I will exit the trade intraday.
I would remain long overall as it seems like the bears should cut its shorts given the good news in Europe. Hopefully there will be some short covering and world indices will continue to go up throughout the day.
Europe’s Debt Crisis. China’s clamp down on real estate. And lastly there is a faulty trade in the US which brought the Dow 1000 points at one point.
However, the HSI seems to have recovered quite a bit from today’s low opening already. Sentiment remains weak. However, we are seeing gradually that more people are going long in this market. The big drops in yesterday’s afternoon and in today’s opening both were recovered quickly.
I still think it’s good buying opportunity below 20000 for HSI. Good luck trading in this turbulent market!
It seems like the world is slowly returning to normal, with Europe and America both down a little bit.
Asia is still weak with Japan and S Korea back in action from holiday.
It seems like the HSI has good support at around the 20100-20200 level.
Action plan for the day:
I believe there won’t be much action today… let’s see if Europe will open up later today. If it actually opens up, I will buy some HSI bull certs in the last hour of trading.
What a day. The HSI opened down 380 points, breaking all the major moving average lines, including the 250 day MA line. Surprisingly, the Shanghai index reversed its drop after lunch and ended up gaining 0.77%. The HSI followed its Shanghai peer, reducing its drop to around 250 points. However, this only lasted for half hour and the index continued to drop and closed at 20328 (down 2.1% – 436 points).
Action for the day
The bull certs bought yesterday were bought at around 20700… Eventually the HSI will go back up, but I just hope that the index will not drop below 19900 – the callable level of my bull certs. If the HSI drops further tomorrow, I may need to roll this bull cert to another one with a lower callable level.
Bought another set of bull cert right before lunch today. I was surprised at the sudden rise in the Shanghai market during lunch so I sold this bull certs shortly after the market reopened after lunch. This is pure luck that the HSI dropped again right after I sold the certs. Lucky me!
It seems like the market will continue to be weak. I guess if Europe and the US stop dropping in today’s trading then the HSI will have some support at this current level tomorrow. Otherwise, I think that it can drop down to 20000 easily.
I wondered why the index suddenly dropped after 3pm, not following through the big jump from the Shanghai market. Is it because they saw Europe was down again at open, and that’s why everyone starts selling again? I haven’t seen Europe played such a big influence on the HK market, but probably this time it is different because it is a Europe crisis.
Plan for the day:
Down day today due to two reasons:
1) US stock markets down last Friday
2) Chinese government increased bank reserve ratio for the third time this year over the weekend
Since mainland market is closed due to labor day holiday, there should not be much news during the day. My forecast is that HSI and HSCEI will both open low, rise a little bit in the 1st hour and then will continue its downtrend throughout the day
Intra-day: Buy HSI or HSCEI bear cert in the morning and sell after a few upticks.
Longer term strategy:
Since HSI and HSCEI are both very close to their 250 day moving averages, this is definitely a buying opportunity. Therefore, I plan to buy some bull certs on HSI, HSCEI right before market closes today. Hopefully, the market will be at its lowest point in the last hour of trading.
Lots of HK stocks have been down for quite a lot since this year. It is not hard to find a stock that has gone down 30% to 50% this year. And last week, even big name stocks like China Communications Construction (1800) was getting washed out — it was down around 10% in one day.
Are people capitulating? The market sentiment is definitely not good. But it seems like at least the first stage of bear market has passed and gone – people are no longer thinking that stocks will rebound and they will sell immediately once the stocks are rebound. People are finally believing that they are losing money.
What a change in sentiment from last year to this year!
The Hang Seng tumbled from the beginning to the end of the day today. This is due to A shares retreating on the same day. There are not that many new reasons prompting this drop. People may be selling to capture some profit in the past few weeks. There are renewed concerns about the Chinese economy. Olympics-related shares such as Li Ning are tumbling fast too. Seems like sentiments are changing. US is currently down now. Probably the Hang Seng will continue its rapid drop tomorrow?
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