One day after the weak trade data out of China, the country decided to combat the economic slowdown with tax cuts. The entire Asian index space is green this morning, with some notable moves in China and Hong Kong.
The Yuan has been gaining over past weeks and approaches the 200-day average soon.
The Hang Seng continues performing well and is at levels last seen in early December. Note this is the highest close above the 50- and 100-day moving averages since last summer. These are healthy moves. Note the big negative trend line. Should the Hang Seng take out this one, the path to the big 28k level is open, which is also where we find the 200-day average.
Tencent is still one of the biggest sentiment stocks to watch for clues in Asia. Just as we mentioned last November, Tencent continues to trade rather well.
The CSI 300 is up some 6.5% from the low print this year. Note the huge negative trend line. A close above this trend as well as the shorter-term averages (50 and 100) and this market risks squeezing more. For a more sustainable rally to take place, the Chinese markets need people to come back and start speculating,.
Trading index is not easy, and one of the hardest indices to trade according to us, is the mighty Nikkei. The Nikkei continues to trade inside a big range, with some very huge swings, that confuse most investors.
Note that TOPIX 30-day volatility (white) now trades well above the volatility of the Chinese CSI 300 index. Haven’t seen that in a while.