the sentiment was that the government will prop up the market before the olympics to create stability and "happiness", so the market should raise before the olympics, then followed by a major selloff after the games end. Of course the government didnt do shit to help the financials, and the market didnt go up before the olympics. So at this point, it's like flipping a coin. Many "analyst" are now saying after the game as the country returns back to normal the market will then raise. China (shanghai) stocks are extremely volatile, even the index, if you try to apply the same technical used in the us market to it you will be whipsawed to death in no time. I got in a small position on the etf50 index after a 55% drop from the bull run highs partly to hedge against the usd, will probably hold it for 10+ years as i believe china is now in the same stage as the US in 1970-80s. There will be bear periods, but the growth potential is still tremendous in the next 20 years.
Unfortunately Shanghai composite index here drop 4.47% today, the biggest drop in the past 7 weeks. We welcomed Olympics in such an unusual way.
And yes, the market is extremely volatile , even more volatile than Hong Kong. The stock index futures will be launched after Olympics, a cash cow indeed.
BTW, The opening ceremony for the 2008 Beijing olympics is now on the air, will last about 3 more hours. can you guys in US see it on TV ?
can't find it on any NBC stations. I only know of 3 (NBC, MSNBC, CNBC). I expect the Chinese economy to implode in 3 or 4 years unless something global wide can pick consumption up. I expect it to decline.
China is not an export-driven economy as most ppl think. Of course so many things are made in China but it doesn't mean that the GDP contribution is big. Here is an arrticle from Economist explaining the case: http://www.economist.com/finance/displaystory.cfm?story_id=10429271
import/export by trading partners http://gbcode.hktdc.com/gb/info.hktdc.com/report/indprof/indprof_080103.htm some explanation on the import/export http://www.eiahk.com/cenartic_426.html Machineries/Electronics account for much a higher share than shoe/shirt/furniture. China will increase GDP even if export value drops if it can increase the domestic value added. China's focus now is the "quality" instead of the "quantity" of export.
Most ppl here may not be able to read the Chinese but the table on left hand side shows the 10 top exports... 9 of them are machinery/electronic goods. The table on the right shows the top imports (1st: crude oil @$9.4B, 2nd: CPU/MCU @$5.8B, LCD panel @3.5B, etc) http://www.jdonline.com.hk/content_new/detail_new.php?news_id=35469 As you can see frm the Economist article mentioned above, China GDP growth in last 2 yr (driven from export) comes not from growth in gross amt of export growth, it comes rather by a much less rapid increase in import so the import/export gap widens.