China’s Magic Tricks Can’t Save Its Stock Market

Chinese policy makers seem to have exhausted whatever magical powers they had been using to keep their economy aloft. Chinese stocks have been plunging even as Beijing has used every trick it knows to support the market.

The truth is that the plunge in the Chinese stock market was long overdue. China’s longest-ever bull market was government-driven, fueled by central bank liquidity and a public-relations bonanza. The question now is whether Beijing’s policy apparatus has lost its ability to impose its will on stock prices. And there’s good reason to think it has.

Stocks slid 3.3 percent Monday even after an aggressive three-pronged easing effort over the weekend. People’s Bank of China Governor Zhou Xiaochuan cut the benchmark lending rate by 25 basis points to a record low of 4.85 percent, slashed the deposit rate to 2 percent and reduced required reserve ratios for some lenders.

As stocks plunged anyway, China’s securities regulators tried to cheer traders by announcing they would consider suspending initial public offerings in order to increase demand for existing shares. The sell orders still accelerated. Next, government officials assured the record numbers of individual investors entering the market that the risks from margin trading are controllable. Selling ensued regardless.

Only time will tell if Beijing’s bag of tricks is empty.

Continue reading on bloombergview.com

China Stock Market Plunge Meets a Dead-cat Bounce

The China stock market found a short-term bottom in the bear market slide…

China steps up support to arrest stock market slide

(Reuters) – China’s efforts to stave off a crash in the world’s most volatile stock market showed signs of gaining traction on Tuesday, with the country’s main share benchmarks surging amid signs of intensifying government support.

Chinese equity markets have fallen more than 20 percent from their peak in mid-June, when a year-long rally fueled by cheap money shuddered to a halt as a crackdown on leveraged stock trading triggered panic selling.

On Monday China’s main indexes had dropped a stomach-churning 7 percent before a sudden reversal. Tuesday began with another market tumble in early trade, before reversing course dramatically as the government scrambled to temper the sell-off.

“Chinese authorities wouldn’t want to trigger a meltdown which would spook investors and we may see more market stabilizing measures on the way,” said Karine Hirn, Hong Kong-based partner of Swedish fund management group East Capital.

Continue Reading on reuters.com

UPDATE: Chinese Stocks Surge After Posting The Biggest Intraday Swing Since 1992

Chinese stocks rallied, sparking the benchmark index’s biggest intraday swing since 1992, on speculation the government will take steps to prevent bear-market losses from deepening.

The Shanghai Composite Index rose for the first in four days, jumping 5.5 percent to 4,277.22 at the close, the most since March 2009. The gauge swung 432 points from the highs and lows, propelling a volatility measure to a seven-year peak. An industry group representing brokerages called on investors and fund managers to take responsibility to stabilize the market after a weekend interest-rate cut failed to stem a rout.

Continue reading on bloomberg.com

June 30 Stock Market Today: Map of the S&P 500

(click the map for a full view)

Day Trading Game Plan: The SPY ETF Chart

The SPY tore through weak support at $207.50  and hit our second support level, the $205 area. A solid and very tradable down trend intra day. Not much pain if you were only looking short. I spoke to a few traders today who were looking to nail a bottom that never came.

Yesterday was one of those days that could wipe you out if you had a long bias and ignored the price action.

Check out this trading education video from yesterday that gives you a clear plan of attack to make the low risk trade.

Stocks to Trade |Tuesday June 30, 2015

Pete’s Notes:

• Obviously looking for follow-through on the short-side but seeing a lot of stocks pulling into support. Not as many opportunities as you would expect.

Interesting Chart Lessons:

ALL Allstate Corporation has some clean “room to go” down to the $62 level. (click the chart for a full view)

Earnings in play today > 1M avg shares: cag

Bullish Ideas ATR/Volume/Price: QIHU, CI, MBLY, WMB, FB, AET, NKE, TSLA, UNH

Bearish Ideas ATR/Volume/Price: isis, rrc, sndk, gmcr, mon, scty, lng, baba, wynn, endp, apc, mmm,

Weak Stock Weak Close: cree, swn, yelp, cbs, ggp, kors, gm, hrb, a, bby, csx, bbby, nbl

Strong Stock Weak Close: UA, CCL,

Weak Stock Strong Close:

Strong Stock Strong Close: QIHU, HZNP

20 day Breakdown: cah, cnx, csx, gt, hpq, lng, flex, nem, mon, ctrp, scty, trn, dd, cbs, qcom, yhoo, nvda, txn, tsm, lltc, orcl, kors, hrb, cvx, jnpr, csco, adi, ctsh, bby, cah, utc, ca, aapl, all, low, mmm, ko, v, hon, stt, ups, hoit, dfs, emc, ba, yum

20 Day Breakout:

2x Normal Volume: wen, cybr, cnx, mro, mu, ing

Watch List Longs: AET, COF, TGT, SBUX, DIS, CVS, UNH, LEN, T, ADBE

Watch List Short: swn, cvx, hal, cost, trv, wmt, sndk, luv, hpq, wynn,

Inside days: mro, wmb, nov, de, rdc, twc, dnkn, oke