Their capital controls have effectively stifled international investment and has made China a roach motel for dollars. They can come in, and but they can't get out. You think under that scenario any sane Chinese would want to bring home their dollars at 6.5 yuan/dollar, as China keeps printing money to keep their Ponzi scheme going? Maybe after a devaluation, the dollars come home, but they'll need to entice them with a much higher exchange rate, probably at least 10 yuan/dollar, and more like 12-15 yuan/dollar. Either that, or have the debt actually be paid off and not rolled over every year. That's not going to happen, because that would lead to a debt deflation crash, so you will eventually see China having to go the devaluation route, whether they like it or not.
China doesn't get to defy the laws of economics by being a command economy. It only lets them delay the inevitable longer than a free market economy.
I am a bit surprised this China news about an official recommending to halt Treasury purchases caused such a selloff in S&P futures. Its not as if China has been a big buyer of Treasuries lately, and they probably don't have the luxury to buy much anyway, considering the lack of dollars flowing in. It does show you how vulnerable this market is getting to any kind of negative catalyst, as higher bond yields are definitely starting to weigh on this market. And the 10 year hasn't even hit 2.60% yet. There is no way this stock market calmly rallies if the 10 year gets anywhere close to 3.00%. Just by that fact alone means that Treasuries can't sell off much from current levels, because stocks will probably also sell off as well.
Still short, but if we can drop down to the 2730 area, will probably cover and look to reshort at higher levels. Crude oil at $63.50 also looks like a sell area, with lots of resistance here around the 2015 top.
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why cover on a drop and add back higher vs adding now, that we are higher?
Seriously how high do we have to go before we can short safely
This is rallying like its coming off a capitulative bottom last month, even though its just been going up almost every day. I haven't seen a market like this ever.
This is the 19 year storm that comes every 19 years. This one has the look and feel of the last one we had in 1999 and 2000. People as in retail have mo ey from bitcoin and bonuses from the tax cuts. This is the top of the 5th inning when the masses will be sucked in. And when they have made money and are all in, they will be trapped in a 10 percent one day down move followed by at least another 20 percent of slow dragging decline lagging months and months
I come feel it coming in the air tonight. - Phil Collins
Yeah, it is once in a generation storm. The dotcom bubble definitely didn't trade like this, there was a lot more volatility. This is just a relentless march higher with no dips. Retail is piling in and they will get destroyed before the dust settles. As always.
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