the Trade-Radar + TradingStockAlerts blog

Earlier this year there were a series of articles in several mainstream newspapers and magazines and on a number of blogs that described labor shortages occurring in China. At the time, I missed all these articles but now I've seen the topic pop up on a couple of tech sites that I visit and I became interested. Accordingly, this post is not intended to provide a specific piece of investment advice but is more an exploration of a news item that I thought might be worth exploring since many of us are focused on China as the engine of the global economy. On the DigiTimes web site, an article declares that China's labor shortages are worsening, particularly in the eastern region. Labor shortages are now an annual issue, but the problem has occurred earlier this year and is more severe. The situation is expected to get worse before the Lunar New Year (in February). In particular, the authors quote managers of electronics firms involved in manufacturing flat panels and related c...

Chinese stocks engaged in a furious run-up earlier this year but recently plunged more than 20%, prompting some observers to note that China is now in a bear market. We are seeing signs of a resurgence. In Thursday night's TrendBusters list , we saw 9 Chinese stocks and ETFs generate BUY signals. This means that they moved up above a previously downward sloping trend line and are now showing signs of an upside breakout. Here's the list: Symbol Name CEA CHINA EASTERN AIRLINES EWH ISHARES MSCI HONG KONG INDEX FXI ISHARES FTSE/XINHUA CHINA GCH GREATER CHINA FUND GXC SPDR S&P CHINA ETF HAO CLAYMORE EXCHANGE- TRADED FUND/ALPHASHARES CHINA SMALL CAP ETF PGJ POWERSHARES GOLDEN DRAGON HALTER USX CHINA PORTFOLIO XPP PROSHARES ULTRA FTSE/XINHUA CHINA 25 ZNH CHINA SOUTHERN AIRLINES COMPANY LIMITED Is it justified? Some numbers were just released. Last month, output at China's factories gained 12.3% from a year earlier. Ret...

The iShares FTSE/Xinhua China 25 Index ETF (FXI) has been in a downtrend for months. In the last month or so it has bounced off a support level in the $140 area several times. The ETF has finally begun to turn up. On Tuesday it came right up against its downward sloping trend line. On Wednesday it fell back within the channel (see chart below). Are we seeing merely technical trading or are there fundamental developments in the Chinese economy that will drive the ETF one way or the other? In reviewing some of the recent news out of China there are a couple of developments that are worth discussing. Inflation China's consumer price index was reported up 7.1% in January, the highest since September 1996 and well above December's 6.5%. This was partially due to the severe winter storms that disrupted economic activity, caused crop damage and generally brought parts of the country to a standstill. Some analysts that this high level will not last and that China will see a moderation ...

We saw a hint yesterday but today we got the confirmation. The iShares FTSE/Xinhua China 25 Index ETF (FXI) has been carving out a wedge-shaped chart pattern for weeks but it has now broken to downside. On October 31, 2007, FXI established its peak closing price at $218.51. At today's closing price of $151.81 it is now down about 30%. With huge gains in Chinese stocks over the prior year, China has been referred to as an equity bubble. For some months, however, it has appeared that Chinese stock markets were getting tired. On the charts, it could be seen that the price action in FXI has been increasingly compressed into the wedge mentioned above. As we got to the end of the wedge, expectations have grown for the ETF to finally break out one way or the other. The situation may have been resolved today and it appears to have been resolved in favor of the bears. Two days with downward gaps have taken FXI from the top of the wedge to clearly below the bottom of the wedge. These moves h...

I recently took a small position in the UltraShort FTSE/Xinhua China 25 ETF (FXP). This is the inverse fund corresponding to the FTSE/Xinhua China 25 ETF (FXI). After peaking in October, FXI has been moving down. It now appears to be forming a wedge-shaped chart pattern (see chart below). Price action on FXI has been narrowing as the ETF begins to get close to the point where the downtrend line meets the horizontal line. It has seemed like we are overdue to find out whether FXI was going break out to the bullish side or to the bearish side. On Thursday of this past week, it looked like the outcome had been resolved in favor of the bulls. Then on Friday, the ETF fell back inside the wedge. We remain waiting for the breakout. Well, I'm no expert on China so I have been relying on the charts. What are others saying about the economic outlook in China? According to academics from Wharton, China's economic situation is fairly positive though it is harder to predict the direction of ...