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China Move


So China has been a rather hot topic these last 12 months… I get it… and most of you will either have incredibly positive things to say OR you’ll be cursing into your cornflakes the very mention of the words “Trade War” - and with good reason… but, you must understand - where we have conflict… and we have a market decline, inevitably there comes a time where we have opportunity, and although Chinese Stocks have NOT been an area I wished to exploit for the discounts on offer these last few months, a Bullish case is now starting to build, and rather than fumble about in the dark hoping for the best, as usual, I prefer the surgeon like approach and my rules based approach - it serves me well.

So why China I hear you ask?

It’s now starting to make sense to me that we should look to identify the areas of the Market and the individual components where we can take advantage, and today I’m going to give a little context as to why I’m now making a Bullish case for China after the ridiculous drop we’ve seen these last 12 months, so bare with me while I do my best to communicate to you in a rational manner.

What has driven the price down in China? Well it’s a combination of things really, but a big component of the decline, is down to 1 simple concept, and it’s fear. It’s the same fear that the media prey upon, and it’s the same fear that made you sell your profitable positions last year, and when the media get those clicks… they keep driving traffic to their articles by promoting fear, and although I’m completely used to it - many of you are not - and many of my clients are not used to it - which is perfectly ok.

You see, news events are just that - News Events.

It’s a means for CNBC, Bloomberg and all the other idiots of the day to communicate complete nonsense to you about the stock market on a daily basis, and whilst I accept there are news event traders who attempt to interpret all the “opinions”, there is one constant that needs to be constantly observed, and it won’t come as any surprise to those that follow me MEGA closely - I’m talking about Price.

The Bullish case for China starts with Tech, and hopefully you understand the chart.

Exhibit A - Chinese Tech

Invesco China Technology 1st April 2019.png

As we can see from the chart above - Chinese Tech is on a recent move from it’s key support level a couple of months ago, and although this is only 1 of 4 charts I am considering in relation to the Chinese Market, I do think it’s worth paying attention to the chart given the influence of the Chinese Tech companies, and the potential that lies therein.

We must always be fluid with our decision making, and we must always reconsider our thesis in the face of overwhelming evidence to the contrary, however, as always, it doesn’t matter what we see reported by all the media talking heads… what matters is price, and price is now starting to move forward.

Will we see a few bumps along the way?

Absolutely we can, but when we look to take advantage of moves within the market, some areas speak a little more loudly and little more clearly than others, and China is now starting to beat it’s chest like an angry gorilla… price is moving… so why not take advantage of what price is telling us.

On Sunday evening, I posted the chart below to my client group for an optimum entry into JD.com, and as expected, we got a 5% move straight off the bat… this is why my Trading Group is 1 of the best in the world… identify the correct area of the market… identify strength… profit… not exactly rocket science.

Exhibit B - JD.com

JD.com 1st April 2019.jpeg

JD.com is a company that I literally know nothing about - that may come as a surprise to you…. in the same way I don’t look at the Fundamentals of a company with any great microscope, I also don’t care what the company does, because I’m only interested in whether the Technical aspects of my trade are met.

I could say the same for Baozun, YY, Baidu, Huya, Bilibili, Momo, Weibo, IQiyi, Alibaba, GDS, Quidian, Sogou, Tencent, Pinduoduo or Qutoutiao - I don’t care what any of them do - I only care about the question - am I likely to make money on this trade? It’s an approach that serves me well.

Trading can obviously be a time consuming / difficult game -so with that said - let me ask you a few direct questions -

  1. How many of you would like to be aligned with this type of Trading Group?

  2. How much would it impact on your annual returns if you could learn a consistent approach and be part of a Group like this?

  3. How much stress would be removed from your decision making, if you knew some of the best private investors in the world agreed with you?

These are the types of questions you should ask yourself, because if you’re someone who has struggled over the last 12 months, and if you’re someone who’s not performed as you would have hoped… what harm can it do to align yourself with a style of Trading that has consistently called time and time and time again the correct Market direction?

Would you not rather receive incredible support BEFORE a move happens? Would you not rather receive updated Market Analysis BEFORE it’s released to Social Media?

What if you were able to make an extra $10k / $50k/ $200k a year by being aligned with this disciplined style of Trading?

I’ll leave that thought with you.

If you want to align yourself with what we do at Honeystocks.com - don’t be shy - click the link below - tell us what you struggle with - we’ll try to help.

Time to Change the Approach?

Sam McCallumComment