Here's a "picture" of the Shanghai stock market over the last 5 years or so. You can see that it PEAKED more than 3 years ago in June of 2015. You can also see that there were likely all kinds of people calling for a "bottom" in September of 2015 ....... and then again in Feb/March of 2016 ..... and again
LAST WEEK.If you recall .... last week I said "look for the Shanghai Market
NEXT WEEK." It has lost about 10% so far this week. And as I said back in Feb/March ..... I think the Shanghai has a "good chance" to get down to the 2,000ish level (between 1,900 - 2,100).
Why? The fundamentals are horrible ..... and we have a goon in the Oval Office that has established policies that are poised to make the
GLOBAL ECONOMIES WORSE. It just depends on
HOW stupid Donnie and Larry (Kudlow) choose to be. I think they are
BOTH pretty damn ignorant .....
AND .... stubborn.
NOT .... a good combination.
And while the US currency is rising quickly this week as interest rates shoot up (think about
TOO MUCH DEBT DONNIE) ....... the Chinese currency is dropping, much to the consternation of Steve Manuchin.
So
HOW and
WHEN will this madness end? Good question ...... please tell me when you know.
Right now ..... China has Trump's balls in a vice grip. China's leader has a
LIFE LONG TERM .... and Donnie doesn't. Donnie has midterm elections in 4 weeks and the China leader
DOESN'T. Donnie has an FBI investigation that is hot on his trail and the Chinese leader
DOESN'T.
So who is in the catbirds seat right now? I think it is pretty obvious. Donnie is starting to look like the New York Yankees in game 4 of their series with Boston the other night ..... and they lost 16-1.
Earlier this year I laid out what lower levels in the markets
MIGHT be achieved, and I thought they could "get there" by the middle of October. Well .... I'm still sticking with my call as to the "level" of where they might end up ..... but clearly this is going to take longer than I expected. Right now ..... it looks like we could get to some kind of "intermediate term bottom" next week before rallying for a couple of months into the end of the year. For various reasons .... cash flow wise ..... November and December are usually UP months for the market. But any short term calls are really "iffy".
Markets are always fickle creatures ..... so any
SHORT TERM CALL like that is fraught with danger.
BUT ..... in the
LONGER TERM ..... the market direction looks to be
DOWN ..... and the likely
NEXT STAB at getting down to really
LOWER LEVELS in the market may be in the coming mid March to early April period of the coming year.
Donnie has done some
REALLY STUPID THINGS in the economic policy area .... and they have to play out. The longer he keeps those things in play, the worse the economy will be and the worse the market will be.
Donnie is going up against the Chinese government ...... and I don't think he realizes that
THEY PLAY FOR KEEPS. They aren't Paul Ryan or Lindsay Graham that he can push around easily. So this could continue to get ugly ..... especially if China continues to let their currency weaken.
Did I mention that the FBI is on his ass as well....