https://www.scmp.com/rss/314709/feed Chart Book is featured daily column at SCMP.com and in print in the South China Morning Post. It brings readers a combination of exclusive sentiment barometers on equity markets, practical technical analysis flagging likely moves across a range of asset classes, and smart graphics that offer insight into evolving market trends. en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com It may not feel like it, especially when one reads the rather breathless media hype, but observed volatility in the Shenzhen A-share index dropped sharply this month. Once again, triangle support kicked in for a third time this year, increasing the importance of this trend line. The hammer candle is a powerful bullish signal, but more importantly forms part of a series of coils, twists and turns in what we feel is an attempt at forming a lasting base. Expect a cautious test of triangle... https://www.scmp.com/business/markets/article/2142506/chart-day-steady-shenzhen?utm_source=rss_feed https://www.scmp.com/business/markets/article/2142506/chart-day-steady-shenzhen?utm_source=rss_feed Fri, 20 Apr 2018 00:02:14 +0000 On Monday, the People’s Bank of China raised the rate on 14-day reverse bond repurchases by 5 basis points to 2.7 per cent, while simultaneously adding 150 billion yuan (US$24 billion) into the money market. As it was doing this, the 10-year bond futures rallied strongly through the important resistance level at around 94.10 yuan, taking the benchmark 10-year yield to 3.718 per cent, its lowest since mid-October. This mirrors the US yield curve, which is flatter than it has been since 2007... https://www.scmp.com/business/markets/article/2142166/chart-day-steady-rally-china-bond-prices?utm_source=rss_feed https://www.scmp.com/business/markets/article/2142166/chart-day-steady-rally-china-bond-prices?utm_source=rss_feed Wed, 18 Apr 2018 00:01:36 +0000 In 2009, the Bank of Japan set its policy balance rate at 10 basis points. But since 2016, the rate has been kept at minus 10 basis points, and the central bank targets the yield on 10-year Japanese government bonds at zero per cent. This is done to encourage economic growth and stave off deflation, though it has been a long and difficult fight. We turn our attention to the yield on 20-year Japanese government bonds, which hovered at around 55 basis points last year. Trading down steadily this... https://www.scmp.com/business/global-economy/article/2141822/chart-day-back-zero-japan-bonds?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/2141822/chart-day-back-zero-japan-bonds?utm_source=rss_feed Mon, 16 Apr 2018 00:00:30 +0000 Beijing’s announcement this week to quadruple the daily caps on the value of shares that can be bought through the Stock Connect programme is seen as part of China’s efforts to integrate its US$7.7 trillion stock markets with their global counterparts. While some argue the move may serve the purpose of boosting equity purchases through the links, data suggests it is far from reality. Ever since the stock links were launched, neither Chinese investors nor foreign traders have filled 10 per cent... https://www.scmp.com/business/markets/article/2141693/chart-day-symbolic-move-chinas-stock-quota-increase?utm_source=rss_feed https://www.scmp.com/business/markets/article/2141693/chart-day-symbolic-move-chinas-stock-quota-increase?utm_source=rss_feed Sat, 14 Apr 2018 00:02:25 +0000 So much sabre-rattling and posturing on the benefits of global trade – yet the price of Shanghai aluminium futures has barely budged recently – and implied volatility is close to its lowest in a decade or so. Volume is good rather than spectacular, suggesting traders and investors see no overriding need to position themselves for the worst. Oversold on the RSI, prices are trying to base one standard deviation below the long-term mean regression. This week they have managed to rally and gap... https://www.scmp.com/business/commodities/article/2141507/chart-day-outlook-shanghai-aluminium?utm_source=rss_feed https://www.scmp.com/business/commodities/article/2141507/chart-day-outlook-shanghai-aluminium?utm_source=rss_feed Fri, 13 Apr 2018 00:04:13 +0000 Volatility has returned to the Chinese stock market this year. The 60-day price swing on the Shanghai Composite Index rose to its highest level in almost two years this week as stocks were roiled by escalating trade tensions between China and the United States. The sell-off in big-caps amid concerns over elevated valuations further added to the volatility. So far this year, the Shanghai benchmark index has seen the daily movement surpassing 1 per cent on a closing basis on 15 trading days,... https://www.scmp.com/business/markets/article/2141335/chart-day-volatility-returns-china-market?utm_source=rss_feed https://www.scmp.com/business/markets/article/2141335/chart-day-volatility-returns-china-market?utm_source=rss_feed Thu, 12 Apr 2018 00:01:32 +0000 Nicole Elliott Nicole Elliott Having trended lower for much of last year, Dalian soybean futures dramatically changed course in March – before the trade wars between US President Donald Trump and his Chinese peer, Xi Jinping. Momentum is more bullish than it has been in years and the moving average convergence divergence – or MACD – is at a record high. Though overbought on the RSI, we feel there is a chance for the contract to break above the top of the Ichimoku cloud. This follows the gap through 38 per cent Fibonacci... https://www.scmp.com/business/markets/article/2141160/chart-day-dalian-soybean-gathers-momentum?utm_source=rss_feed https://www.scmp.com/business/markets/article/2141160/chart-day-dalian-soybean-gathers-momentum?utm_source=rss_feed Wed, 11 Apr 2018 00:01:20 +0000 Malaysian Prime Minister Najib Razak dissolved parliament on Friday, paving the way for a general election in which he will compete against his old adversary, veteran politician Mahathir Mohamad. Because the result is considered to be the most unpredictable in the country’s history, let’s see if the chart of Malaysia’s currency can help shed some light. The salient feature of this monthly chart is the drop from nearly 4.47 Malaysian ringgit to the US dollar both in 2015-16 and 2017-18. Hovering... https://www.scmp.com/business/markets/article/2140817/chart-day-malaysian-ringgit-way-basing?utm_source=rss_feed https://www.scmp.com/business/markets/article/2140817/chart-day-malaysian-ringgit-way-basing?utm_source=rss_feed Mon, 09 Apr 2018 00:03:34 +0000 It took seven whole years for the tech-heavy Nasdaq Composite Index to break above the record high of 4,800 points set in 2000. Since then, the rally had kept to a steep but narrow trend channel throughout last year – until possible over-exuberance set in this year. After gapping lower in March, the index retested the 200-day simple moving average this week. With so many investors favouring the index tracking and momentum trading styles, the risk is they will all be bailing out simultaneously.... https://www.scmp.com/business/markets/article/2140484/chart-day-warning-signal-nasdaq?utm_source=rss_feed https://www.scmp.com/business/markets/article/2140484/chart-day-warning-signal-nasdaq?utm_source=rss_feed Fri, 06 Apr 2018 00:00:45 +0000 Chinese-listed technology companies are likely to suffer a blow from policymakers’ recent move to lure their overseas-traded peers back for a domestic listing. Based on their reported price-earnings ratio, the 470 technology firms on the Shanghai and Shenzhen exchanges were at least 87 per cent more expensive than the overseas-listed trio of industry giants Baidu, Alibaba Group Holding and Tencent Holdings, Bloomberg data showed. JD.com trades at 51.8 times estimated earnings for this year as... https://www.scmp.com/business/markets/article/2140332/chart-day-harsh-truth-looms-china-tech-stocks?utm_source=rss_feed https://www.scmp.com/business/markets/article/2140332/chart-day-harsh-truth-looms-china-tech-stocks?utm_source=rss_feed Thu, 05 Apr 2018 00:00:20 +0000 Global stock markets have had a troubling couple of months as the threat of potential trade wars between the United States and China escalates. Like others, the Shenzhen A-Share Index saw an A, B, C-type correction but then found its feet as we wrote at the end of February. The rally in the last week of March was also impressive, filling the gap created on the way down and gapping again on the way up, thus forming an island reversal. It has broken above the thin Ichimoku cloud, and though moving... https://www.scmp.com/business/china-business/article/2140164/chart-day-shenzhen-shares-impress?utm_source=rss_feed https://www.scmp.com/business/china-business/article/2140164/chart-day-shenzhen-shares-impress?utm_source=rss_feed Wed, 04 Apr 2018 00:00:40 +0000 China’s ChiNext index of small-caps has staged a turnaround, delivering the biggest gain among all gauges in China and Hong Kong in the first quarter. After two years of declines, the index is back in favour with traders as valuations fall to reasonable levels and the government ratchets up support for companies in innovative industries. The measure was the worst performer in 2017. Meanwhile, the SSE 50 Index of the most valuable companies on the Shanghai exchange, including Kweichow Moutai and... https://www.scmp.com/business/china-business/article/2139990/chart-day-roar-chinas-chinext?utm_source=rss_feed https://www.scmp.com/business/china-business/article/2139990/chart-day-roar-chinas-chinext?utm_source=rss_feed Tue, 03 Apr 2018 00:03:13 +0000 We earlier advised readers to watch the candles of the chart on the ChiNext Growth Enterprise Board carefully to spot basing activity, preferably something sharp and dramatic. We certainly got that last week, with a massive Marabuzo bullish engulfing candle that has overtaken all price action of the previous four weeks. This seldom-seen phenomenon lies in stark contrast to the drubbing Western stock indices suffered in March. It reinforces the effect of the large V-shaped reversal we spotted in... https://www.scmp.com/business/china-business/article/2139852/chart-day-chinext-phenomenon?utm_source=rss_feed https://www.scmp.com/business/china-business/article/2139852/chart-day-chinext-phenomenon?utm_source=rss_feed Mon, 02 Apr 2018 00:03:08 +0000 As mentioned in late February, we believe the onshore yuan is in the process of forming a double bottom against 6.26 per US dollar, in what now looks like a rectangle chart pattern. This has taken longer than expected and is in stark contrast to the ferocious tumble the exchange rate has seen since the middle of December. Though the cloud continues to cap the candles, moving averages are now mixed. Daily and weekly closes above 6.36 yuan will complete an interim base, allowing the dollar to... https://www.scmp.com/business/china-business/article/2139565/chart-day-yuan-way-basing?utm_source=rss_feed https://www.scmp.com/business/china-business/article/2139565/chart-day-yuan-way-basing?utm_source=rss_feed Fri, 30 Mar 2018 00:03:47 +0000 Last week, Yi Gang was appointed as governor of the People’s Bank of China, replacing retiring Zhou Xiaochuan, who had held the post since 2002. Luckily for the new kid on the block, the 10-year bond futures prices simultaneously rallied strongly, slicing quickly through long-term trend-line resistance and gapping higher on Friday on good volume to test horizontal resistance. Benchmark yields are reflecting this new bullish phase, with 10-year yields dropping steadily from 4 per cent to 3.75 per... https://www.scmp.com/business/china-business/article/2139177/chart-day-bonds-rally-new-governor?utm_source=rss_feed https://www.scmp.com/business/china-business/article/2139177/chart-day-bonds-rally-new-governor?utm_source=rss_feed Wed, 28 Mar 2018 00:01:37 +0000 As noted in early November, if the Hang Seng Index were to manage a weekly close above 28,800 points, one should prepare for more gains. We certainly got that through to the end of January, culminating in a parabolic surge for seven consecutive weeks to take the index above its well-established trend channel. But this all ended suddenly, gapping back down to the bottom of the channel, which has held miraculously for the following six weeks. The move mirrors that of other global indices, where we... https://www.scmp.com/business/markets/article/2138843/chart-day-reversal-fortune-hang-seng-index?utm_source=rss_feed https://www.scmp.com/business/markets/article/2138843/chart-day-reversal-fortune-hang-seng-index?utm_source=rss_feed Mon, 26 Mar 2018 00:02:16 +0000 Zhengzhou cotton futures are not the most active, reflected in the way the contract charts, something a trained eye can usually spot easily. One can see lots of gaps between the candles – because there are few trades at various price levels; the candles are often very small, caused by low volume, followed by very big ones when a seller finds there are no bids (and less often vice versa); trend lines do not hold well; and support/resistance levels are unclear. We have spotted these here but still... https://www.scmp.com/business/commodities/article/2138507/chart-day-support-zhengzhou-cotton?utm_source=rss_feed https://www.scmp.com/business/commodities/article/2138507/chart-day-support-zhengzhou-cotton?utm_source=rss_feed Fri, 23 Mar 2018 00:03:31 +0000 As we warned in late January, the sixth consecutive bullish weekly candle was a signal that this market’s character had changed. Observed volatility of the Hang Seng China Enterprises Index futures contract exploded from historically low levels at about 13 per cent to match 2015’s highs at 40 per cent. Ahead of important chart resistance at between 14,500 and 15,000 points, sentiment suddenly turned with the biggest weekly drop in years. Retracement support stemmed the flow, just ahead of trend... https://www.scmp.com/business/markets/article/2138113/chart-day-swings-and-roundabouts-hong-kong?utm_source=rss_feed https://www.scmp.com/business/markets/article/2138113/chart-day-swings-and-roundabouts-hong-kong?utm_source=rss_feed Wed, 21 Mar 2018 00:02:47 +0000 The market value of China’s US$7.8 trillion stock market is likely to grow 6 per cent if policymakers succeed in wooing the country’s unicorns, or start-ups valued at more than US$1 billion, to list their shares on the domestic bourses. The world’s second-largest economy is home to an estimated 120 of these companies with a combined valuation of 3 trillion yuan (US$473 billion), according to brokerage data. Ant Financial Services Group, backed by Alibaba Group Holding, which owns the South China... https://www.scmp.com/business/markets/article/2137933/chart-day-leading-chinas-unicorn-league-china?utm_source=rss_feed https://www.scmp.com/business/markets/article/2137933/chart-day-leading-chinas-unicorn-league-china?utm_source=rss_feed Tue, 20 Mar 2018 00:00:45 +0000 As if Brexit is not enough to be getting on with, now we have got an espionage scandal worthy of a James Bond novel, and an outspoken new director of the US National Economic Council, the television pundit and presenter Larry Kudlow. Yet, despite these not inconsiderable headwinds, the pound keeps marching steadily onwards and upwards against the US dollar. A good one to remember: economics and politics do not necessarily determine exchange rates; supply and demand do, to which one might add... https://www.scmp.com/business/global-economy/article/2137758/chart-day-beleaguered-britain-battles?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/2137758/chart-day-beleaguered-britain-battles?utm_source=rss_feed Mon, 19 Mar 2018 00:03:17 +0000 In mid-January, we noted that the ChiNext growth enterprise board’s trend to lower prices was on declining volume, suggesting reluctant sellers and a waning bear move. We advised readers to watch the candles carefully to spot basing activity, preferably something sharp and dramatic. Though it was not as fast as we had hoped, we have ended up with a large V-shaped reversal. From February, volume and volatility picked up, suggesting a new group of active participants in this market. This week, we... https://www.scmp.com/business/markets/article/2137416/chart-day-renewed-strength-chinas-high-growth-start-ups?utm_source=rss_feed https://www.scmp.com/business/markets/article/2137416/chart-day-renewed-strength-chinas-high-growth-start-ups?utm_source=rss_feed Fri, 16 Mar 2018 00:03:38 +0000 The fortnight at the end of January and the beginning of February certainly rattled China’s CSI 300 Index of leading shares in Shanghai and Shenzhen. It was not alone. The move mirrored across the world as investors suddenly took fright. Looking long term, one can see that this index has been working in a relatively narrow trend channel since March 2016, its lower edge once again doing a good job limiting the downside. The 26-week moving average has also scooped many weekly lows along the way,... https://www.scmp.com/business/markets/article/2137062/chart-day-china-stocks-trending-higher?utm_source=rss_feed https://www.scmp.com/business/markets/article/2137062/chart-day-china-stocks-trending-higher?utm_source=rss_feed Wed, 14 Mar 2018 00:02:30 +0000 On the coming Sunday, the first round of Russia’s presidential election will take place. Incumbent Vladimir Putin is well ahead in the polls, with approval ratings consistently well above 40 per cent, but he is not leaving anything to chance with an active campaign. From a low base in the second quarter of 2017, the Moscow Exchange’s index of its 50 most liquid shares has rallied steadily in a series of neat steps. Unlike other European bourses, February’s upset has been minimal and it is... https://www.scmp.com/business/markets/article/2136755/chart-day-russian-stocks-upward-trend?utm_source=rss_feed https://www.scmp.com/business/markets/article/2136755/chart-day-russian-stocks-upward-trend?utm_source=rss_feed Mon, 12 Mar 2018 00:03:26 +0000 China’s Minister of Finance Xiao Jie insists fiscal policy remains supportive for economic growth. This is reflected in the price of 10-year sovereign bond futures, where we are in the process of switching from the March 2018 contract to the one in June as the most active. Prices have rallied, as we predicted a month ago, and the small irregular double bottom has led to a break above a thin Ichimoku cloud. We are now back at levels that predominated in the fourth quarter of 2017, and benchmark... https://www.scmp.com/business/markets/article/2136453/chart-day-onward-china-growth?utm_source=rss_feed https://www.scmp.com/business/markets/article/2136453/chart-day-onward-china-growth?utm_source=rss_feed Fri, 09 Mar 2018 00:01:41 +0000 China’s small-caps are staging a comeback. While traders offloaded holdings of the larger blue chips on concerns that their earnings growth would fail to support their elevated valuations, they piled into smaller companies, helping to lift these stocks from a three-year low. The ChiNext index of growth companies jumped 6.2 per cent in Shenzhen last week, outperforming the benchmark Shanghai Composite Index by the most in almost two years. It has extended the gain by 0.8 per cent so far this... https://www.scmp.com/business/markets/article/2136211/chart-day-chinas-small-caps-back-radar?utm_source=rss_feed https://www.scmp.com/business/markets/article/2136211/chart-day-chinas-small-caps-back-radar?utm_source=rss_feed Thu, 08 Mar 2018 00:03:28 +0000 Nicole Elliott Nicole Elliott Scorching temperatures and a drought in Argentina have seriously affected this season’s soy crop. Though on the other side of the world, it has started to affect the price of soybean meal on the Dalian Commodity Exchange. The recent rally, while not on the scale of the sharp gyrations of 2016, has seen the highest weekly close in a year. A golden cross (the 50-day moving average crossing above the 200-day one) happened in November and this has acted as support to prices for a good six months.... https://www.scmp.com/business/commodities/article/2136036/chart-day-building-soybean-burst?utm_source=rss_feed https://www.scmp.com/business/commodities/article/2136036/chart-day-building-soybean-burst?utm_source=rss_feed Wed, 07 Mar 2018 00:03:50 +0000 Since US President Donald Trump’s pledge to make America great again, the 24-year-old North American Free Trade Agreement between Canada, Mexico and the US has been under pressure. This ratcheted up another notch over the weekend as Trump said he would impose aluminium and steel import duties this week. Another bone of contention are lumber imports from Canada, reflected in the steady rally in prices since his election. February saw futures contracts hit a record high above the psychologically... https://www.scmp.com/business/markets/article/2135846/chart-day-limbering-lumber?utm_source=rss_feed https://www.scmp.com/business/markets/article/2135846/chart-day-limbering-lumber?utm_source=rss_feed Tue, 06 Mar 2018 00:00:33 +0000 As we pointed out early in February, the slump in the Shenzhen A-Share Index since October is an A, B, C-type correction where the C leg dropped nearly 161 per cent of the height of the A wave. Fibonacci 61 per cent retracement from the late 2012 low caught the nadir exactly, the dip below trend-line support (again from the 2012 low) is an extension in a highly volatile market. We have now completed an impressive hammer candle on the monthly chart marking an intermediate low point, rather like... https://www.scmp.com/business/markets/article/2135344/chart-day-shenzhen-shares-battle?utm_source=rss_feed https://www.scmp.com/business/markets/article/2135344/chart-day-shenzhen-shares-battle?utm_source=rss_feed Fri, 02 Mar 2018 00:02:27 +0000 Zhengzhou’s terephthalic acid futures contract may have an unfamiliar name, but its use in making polyethylene terephthalate plastic bottles makes it a common sight. In November last year, we noted “plenty of room on the upside [for prices]”. The pace has picked up again following the Lunar New Year holiday, as has observed volatility, which is now well above the mean regression of the past three years. Over this period, the market formed a gentle rounded base, a chart pattern that will be... https://www.scmp.com/business/markets/article/2134982/chart-day-uncommon-futures-common-sight?utm_source=rss_feed https://www.scmp.com/business/markets/article/2134982/chart-day-uncommon-futures-common-sight?utm_source=rss_feed Wed, 28 Feb 2018 00:01:02 +0000 Inflation came in at an annualised gain of 1.7 per cent in Sweden last month, falling short of the Riksbank’s 2 per cent target. In Friday’s minutes of its latest rate-setting meeting, the central bank hinted that the current negative 50-basis-point target, in force for two years, could delay its first rise since 2011. This has affected the exchange rate of the krona, taking it to 10.06 to the euro and on track for one of its weakest monthly closes in 25 years, except between the fourth quarter... https://www.scmp.com/business/markets/article/2134654/chart-day-further-weakness-swedish-krona?utm_source=rss_feed https://www.scmp.com/business/markets/article/2134654/chart-day-further-weakness-swedish-krona?utm_source=rss_feed Mon, 26 Feb 2018 00:02:50 +0000 The onshore yuan reached our target of 6.32 per US dollar rather sooner than expected, with the offshore exchange rate keeping neck and neck with it (the differential now nil). Observed volatility on both has increased considerably since mid-December to some of the highest levels in six months. Over the past three weeks, volume in the offshore yuan has been excellent, adding weight to our view that the market is in the process of forming a double bottom against 6.27 – or a rounded base. With the... https://www.scmp.com/business/markets/article/2134358/chart-day-yuan-dollar-rate-bottoming-out?utm_source=rss_feed https://www.scmp.com/business/markets/article/2134358/chart-day-yuan-dollar-rate-bottoming-out?utm_source=rss_feed Fri, 23 Feb 2018 00:02:54 +0000 The top 50 companies of the 12 euro-zone countries are sometimes known as super-sector leaders. Unfortunately, the index has been leading on the way down so far this year following the failure last month to surpass the high in 2017. The doji at the 3,680-point level completes a triple-top chart pattern, and the Ichimoku moving averages and the Western 50- and 200-day ones look set to turn bearish. Last week, it managed to bounce from decent cloud support, but it is now likely to be capped by the... https://www.scmp.com/business/markets/article/2134027/chart-day-bearish-outlook-europes-stocks?utm_source=rss_feed https://www.scmp.com/business/markets/article/2134027/chart-day-bearish-outlook-europes-stocks?utm_source=rss_feed Wed, 21 Feb 2018 00:03:14 +0000 While wishing our readers health, happiness and prosperity in this Year of the Dog, we would like to point to developments in Japan this month. On Friday, central bank veteran Haruhiko Kuroda was reappointed for a second term as governor of the Bank of Japan, and his deputies will be Masayoshi Amamiya (the central bank’s executive director) and Masazumi Wakatabe of Waseda University. They have their work cut out for them, and now a rapidly appreciating yen (up 3 per cent since the beginning of... https://www.scmp.com/business/markets/article/2133743/chart-day-rising-yen-adds-japan-challenges?utm_source=rss_feed https://www.scmp.com/business/markets/article/2133743/chart-day-rising-yen-adds-japan-challenges?utm_source=rss_feed Mon, 19 Feb 2018 00:03:42 +0000 Months ago, we pointed out the small rounded base that was forming ahead of the Ichimoku cloud and Fibonacci retracement support, saying it would be completed when Shanghai lead prices managed to break and hold above the 38 per cent retracement level at 19,454 yuan (US$3,065) per tonne. It tried to do so in late January and early February, but slipped and lost its footing last week. We feel this is temporary and that while the 50 per cent retracement support level holds, prices will trade higher... https://www.scmp.com/business/markets/article/2133554/chart-day-shanghai-lead-keeps-shine?utm_source=rss_feed https://www.scmp.com/business/markets/article/2133554/chart-day-shanghai-lead-keeps-shine?utm_source=rss_feed Fri, 16 Feb 2018 00:03:05 +0000 China’s margin traders rushed to cut their holdings of stocks bought with debts after the Shanghai Composite Index slumped 9.6 per cent last week to become the worst performer in a global sell-off. The outstanding balance of margin debts on the Shanghai and Shenzhen exchanges shrank to 1 trillion yuan (US$157.7 billion) on Monday after having fallen for nine consecutive trading sessions. That marked a 7 per cent drop from the two-year high recorded on January 30. A fast decline in equities often... https://www.scmp.com/business/markets/article/2133420/chart-day-china-margin-traders-rush-exit?utm_source=rss_feed https://www.scmp.com/business/markets/article/2133420/chart-day-china-margin-traders-rush-exit?utm_source=rss_feed Thu, 15 Feb 2018 00:00:46 +0000 The fortnight preceding the Lunar New Year saw jittery stock markets keeping an eye on bond yields, wondering whether they should feel worried. For Chinese markets, the holiday might be a good time to take stock and see if the global dust settles. China’s 10-year sovereign bond yields soared to 4.12 per cent in January, having struggled at the 4 per cent area in the previous two months because this is a Fibonacci 61 per cent retracement from 2014’s high of 4.77 per cent, in turn lower than... https://www.scmp.com/business/markets/article/2133253/chart-day-keep-eye-stocks-and-bonds?utm_source=rss_feed https://www.scmp.com/business/markets/article/2133253/chart-day-keep-eye-stocks-and-bonds?utm_source=rss_feed Wed, 14 Feb 2018 00:00:58 +0000 When the People’s Bank of China triggered the devaluation of the yuan back in August 2015, the one-year US dollar-yuan forward premium jumped as high as 4,000 pips later that year. Over the past 12 months, the yuan has strengthened and taken back nearly all its losses since the devaluation. Concurrently, the one-year forward premium has narrowed to about 1,100 pips last week. But in the past week, it has retraced back to 1,500 pips. According to a report by UOB, while it is premature to say this... https://www.scmp.com/business/banking-finance/article/2133088/chart-day-signs-stabilising-yuan?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/2133088/chart-day-signs-stabilising-yuan?utm_source=rss_feed Tue, 13 Feb 2018 00:02:20 +0000 All of a sudden, stock markets in many countries got a case of the jitters, having seen a sharp sell-off over the past two weeks in what is a classic correction (a drop of roughly 10 per cent). Analysts tell us it is not warranted as global economic fundamentals this year are sound. That may be the case, but certainly sentiment has changed and perhaps investors are realising that some assets are just too expensive. This might be the case for the Straits Times Index of the top 30 companies in... https://www.scmp.com/business/markets/article/2132938/chart-day-singapore-stocks-under-pressure?utm_source=rss_feed https://www.scmp.com/business/markets/article/2132938/chart-day-singapore-stocks-under-pressure?utm_source=rss_feed Mon, 12 Feb 2018 00:00:57 +0000 Exactly a month ago, we wrote that the CSI 300 Index had strong bullish momentum, hoping it would rally to our second target at 4,400 points by the Lunar New Year, and it did so in style. Look what happened next though, swooning along with many global equity indices on very high volume as investors panic. At times like this, what is needed are clear heads and proper tactics. Observed volatility after the fall is back to its long-term mean, so it could increase even further. Prepare for big moves... https://www.scmp.com/business/markets/article/2132628/chart-day-swooning-csi-300-index?utm_source=rss_feed https://www.scmp.com/business/markets/article/2132628/chart-day-swooning-csi-300-index?utm_source=rss_feed Fri, 09 Feb 2018 00:03:19 +0000 In October, the Shenzhen A-Share Index disappointed, stuck under resistance at around 2,130 points; In November, it surprised by collapsing through cloud support, yet then got back onto a more even keel in December. Once again, we have been shocked by the latest slump, the biggest bloodbath since January 2016. But rather than throwing our hands up in despair, we are looking for signs of basing in what we see as an A, B, C-type correction lower where the C leg has dropped by nearly as much as the... https://www.scmp.com/business/money/article/2132470/chart-day-shenzhen-shares-slump?utm_source=rss_feed https://www.scmp.com/business/money/article/2132470/chart-day-shenzhen-shares-slump?utm_source=rss_feed Wed, 07 Feb 2018 16:17:30 +0000 US President Donald Trump boasted about his economic achievements, but here he is keeping quiet. From the day he started work, the US Dollar Index has lost 15 per cent of its value. At the end of last year, it settled (on a monthly basis) just under the 92.65 horizontal support area that had limited the downside for the past three years. Being a time when markets are thin, we watched and waited for confirmation of an important long-term break down. January certainly gave us that with a sudden... https://www.scmp.com/business/markets/article/2131965/chart-day-dollar-danger-zone?utm_source=rss_feed https://www.scmp.com/business/markets/article/2131965/chart-day-dollar-danger-zone?utm_source=rss_feed Mon, 05 Feb 2018 00:03:16 +0000 Since the second quarter of 2017, Dalian iron ore futures prices have been held in a vice-like grip, stuck between 50 per cent retracement resistance (and now the top of the weekly Ichimoku cloud) and trend-line support. January’s three consecutive red weekly candles, known as the “three white soldiers” candle pattern, have turned momentum bullish at last. Observed volatility has picked up, too, suggesting a break higher is imminent, helped by the bullish golden cross of the 50- and 200-day... https://www.scmp.com/business/markets/article/2131652/chart-day-dalian-iron-ore-set-rally?utm_source=rss_feed https://www.scmp.com/business/markets/article/2131652/chart-day-dalian-iron-ore-set-rally?utm_source=rss_feed Fri, 02 Feb 2018 00:03:44 +0000 Set up in 1993, the Dalian Commodity Exchange is now the second-largest agricultural bourse in the world with a 29 per cent market share. It also trades in coal and industrial materials. Polypropylene is the second-most produced plastic after polyethylene, and its chart is very interesting this week. On Monday’s open, it gapped through Fibonacci retracement resistance at 9,600 yuan (US$1,516) per tonne, hinting at a major burst through a level that has capped for three years. If it settles above... https://www.scmp.com/business/markets/article/2131277/chart-day-china-polypropylene-propels-higher?utm_source=rss_feed https://www.scmp.com/business/markets/article/2131277/chart-day-china-polypropylene-propels-higher?utm_source=rss_feed Wed, 31 Jan 2018 00:03:44 +0000 For the first time in more than a decade, the implied volatility on a one-month, 10-delta, at-the-money call on the British pound against the US dollar is higher than the cost of buying a cable put, standing at 10.2 per cent. This is despite the ongoing discussions surrounding Brexit. The move underlines just how wrong so many were and how many bets against the pound have begun to be unwound. Last week, the pound matched the opening price on the day the referendum results were announced in June... https://www.scmp.com/business/markets/article/2130956/chart-day-upside-potential-british-pound?utm_source=rss_feed https://www.scmp.com/business/markets/article/2130956/chart-day-upside-potential-british-pound?utm_source=rss_feed Mon, 29 Jan 2018 00:04:06 +0000 Just as we wrote in the first week this year, the Hang Seng China Enterprises futures contract retested last year’s high at 12,095 and topped it off with a weekly close above that. This caused bullish momentum to increase dramatically, and for observed volatility to pick up from extremely low levels to its long-term mean at 20 per cent. Combined, these technical features have conspired to cause a potential sixth consecutive bullish weekly candle. One of the strongest monthly moves in a decade,... https://www.scmp.com/business/markets/article/2130627/chart-day-china-futures-back-bang?utm_source=rss_feed https://www.scmp.com/business/markets/article/2130627/chart-day-china-futures-back-bang?utm_source=rss_feed Fri, 26 Jan 2018 00:00:43 +0000 Since Christmas, volume in the Shanghai A-Share Index has increased significantly although observed volatility remained subdued. This suggests new long positions have been established during the past three weeks of strong gains, with the top of the right-angled triangle acting as a platform for a sustained break above long-term Fibonacci 38 per cent retracement resistance. The third of the three consecutive “white soldiers” managed a weekly close at the highest point in more than two years,... https://www.scmp.com/business/markets/article/2130253/chart-day-bullish-signals-chinas-shares?utm_source=rss_feed https://www.scmp.com/business/markets/article/2130253/chart-day-bullish-signals-chinas-shares?utm_source=rss_feed Wed, 24 Jan 2018 00:02:29 +0000 Signs are showing that investors are getting increasingly wary of the rapid gains in China’s big-cap shares. The volatility index linked to the 50 biggest companies on the Shanghai exchange rose to a record high in the week to January 19 before dropping slightly on January 22. The last time when the gauge set a record in November, the SSE 50 Index fell as much as 7 per cent in the following three weeks. So far this year, the SSE 50 Index has jumped 9.4 per cent, taking its 14-day relative... https://www.scmp.com/business/markets/article/2130088/chart-day-worrying-signs-chinas-big-caps?utm_source=rss_feed https://www.scmp.com/business/markets/article/2130088/chart-day-worrying-signs-chinas-big-caps?utm_source=rss_feed Mon, 22 Jan 2018 15:59:21 +0000 Since President Donald Trump started work, the US dollar has done nothing but roll downhill, losing its value against all other major currencies. Leading the pack is the euro, despite the weaker economic growth and higher unemployment in the euro zone than in the US, closely followed by the Mexican peso, which has gained 14 per cent during the period despite concerns over the North American Free Trade Agreement (Nafta). On Friday, the euro managed a weekly close above the 50 per cent retracement... https://www.scmp.com/business/markets/article/2129915/chart-day-euro-roll?utm_source=rss_feed https://www.scmp.com/business/markets/article/2129915/chart-day-euro-roll?utm_source=rss_feed Sun, 21 Jan 2018 14:46:11 +0000 Unlike other Chinese stock indices which saw strong starts to 2018, the index of shares of the ChiNext Growth Enterprise Board crumbled. Once again resistance from the falling Ichimoku cloud is to blame, potentially turning moving averages to bearish. Interestingly, the trend to lower prices, which started after the National Day holiday, has been on steadily declining volume suggesting reluctant sellers and a waning bear move. Because we are also close to last year’s low, in turn the lowest... https://www.scmp.com/business/markets/article/2129588/chart-day-chinext-index-out-kilter?utm_source=rss_feed https://www.scmp.com/business/markets/article/2129588/chart-day-chinext-index-out-kilter?utm_source=rss_feed Thu, 18 Jan 2018 16:11:28 +0000 Like many major currencies, the onshore yuan has appreciated against the US dollar since January last year. While it is not leading this large pack – which was the euro, with a 16 per cent increase – or a laggard like the kiwi, the Swiss franc and the yen with 4 per cent gains, it is somewhere in the middle, having risen 8 per cent. Appreciation accelerated significantly on this year’s break below the large cloud and the lagging line’s slide through its thin part. On Friday, it managed the... https://www.scmp.com/business/markets/article/2128550/chart-day-looking-yuan-burst?utm_source=rss_feed https://www.scmp.com/business/markets/article/2128550/chart-day-looking-yuan-burst?utm_source=rss_feed Tue, 16 Jan 2018 15:30:22 +0000