China Weak Again

Overnight, despite a good PMI number from China, the China H-shares market rallied early and then plummeted in the final two hours of trading to finish down 2.5% on the day.  Shanghai was weak last week.  H-shares weak this week.  We haven't seen that kind of action coming from China in a long time.  It is something to pay attention to in the coming weeks.  Europe and US markets are very benign, like watching paint dry.

It is hard to find good trading ideas.  I find many more worthy bearish ideas than bullish ones now.  But that is dangerous in a roaring bull market.  This week seems like a good week to just take a long break.  Probably will not miss much, and in a low volatility environment, it's important to not overtrade.  There are always opportunities in the market, but in my sphere of knowledge, there are almost none.  Good times will come again, I just don't know when.

As I said a couple weeks ago, it feels like November of 2006, when the markets were making new highs, coming off a interest rate scare, volatility was low, sentiment was bullish, and commodities were strong.  If you follow that analog, we have about another 6 months of upward action before we hit turbulence.  That agrees with what I am seeing in the stock and bond markets.  We will have small pullbacks, but they will be gobbled up by ravenous dip buyers.  It is too early to play for a big picture short and a correction.  That time will come in 2015.

I don't want to repeat myself, and with nothing going on, I will be taking a blog break for the rest of the week.  I will make some tweets if I see anything worth mentioning.