Excellent graph from Minyanville.com (click to enlarge) showing a stark pattern of 4 bubbles... almost frightful in identical magnitude of each move both in the peaks (for all 4) and eventual falls (for the first 3, one to go)
First bubble, Japan (Nikkei) - orange
Second bubble, Nasdaq - yellow
Third bubble, home builder index - white
Fourth, Shanghai index - green
For those looking at silver lining, it looks like we could be somewhat close to bottoming out on the home builders... but again that does not mean a spike, turnaround and move up by 100% - as the pattern indicates, things can go "sideways" for ... years.
If Shanghai follows suit we will be talking about a drop from 6000 to 2000. The first 1000 is already in the bag, only 3000 more painful points to go. If you believe in such things ;) One other wrinkle is Shanghai is not truly an open market, with foreign investors allowed nor shorting. But we'll see if human fright during a downfall, and natural herd tendency, is more powerful than socialist controls...
Long Ultrashort Xinghau China 25 in fund and personal account
5 comments:
Excellent chart! FXP looks like the way to go. I'm curious how long you've been in, or what your cost average is?
Cheers,
BD
Where is the article on Minyanville where you got this chart from?
Keep up the great work.
Bluedog,
One thing Marketocracy.com lacks is an average cost basis, it just shows you total dollar in buys and total dollars in sales, so you have a net gain. Its currently about $3K for FXP. This is a very dangerous instrument as its volatility is extreme and it can move 10-15% in a day. Great when you are on the right side but not so great when it goes against you. I've focused more on EEV which is a general emerging markets Ultrashort but have been in both since they were introduced in October in some shape or form. As with all my Ultrashorts I hold them in varying degrees and make adjustments weekly - i.e. in periods of strength for the overall market I like to buy them, and then draw down on periods of weakness in the market. Right now I am at a very high exposure simply because the market doesn't look too great for me.
Bob, there was no specific article on this subject - through my broker I have access to a piece of the website where the traders have daily entries about their thoughts so I grabbed it from there.
Bluedog,
One thing Marketocracy.com lacks is an average cost basis, it just shows you total dollar in buys and total dollars in sales, so you have a net gain. Its currently about $3K for FXP. This is a very dangerous instrument as its volatility is extreme and it can move 10-15% in a day. Great when you are on the right side but not so great when it goes against you. I've focused more on EEV which is a general emerging markets Ultrashort but have been in both since they were introduced in October in some shape or form. As with all my Ultrashorts I hold them in varying degrees and make adjustments weekly - i.e. in periods of strength for the overall market I like to buy them, and then draw down on periods of weakness in the market. Right now I am at a very high exposure simply because the market doesn't look too great for me.
Bob, there was no specific article on this subject - through my broker I have access to a piece of the website where the traders have daily entries about their thoughts so I grabbed it from there.
Thanks, Mark. I'm not in FXP but have been watching it for a few months. It's volatility is scary!
-BD
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