China alarmed by US money printing

I don't know who is Cheng Siwei, but what he said corresponds to my speculation theme:

• Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".
• "If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.
• "Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.
• "Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down."

I like this quote: "He who goes borrowing, goes sorrowing"

Original source from The Telegraph

Cuts Like A Knife

SSECI Daily Chart

Possible support now is at 2500 to 2600. I think that if it can find a temporary bottom in this few days, then it should give a quick rebound to the upside (up to 3000). The long candles indicate panic.

Shopping Spree.....

When you have the money, you can buy buy buy! You can see that China is buying a lot of commodities.

• Cnooc & Sinopec: CNOOC, Sinopec JV to Buy 20% Stake in Angolan Oil Block (20 Jul 2009)
  
• Cnooc: China wants all of Repsol’s Latin American oil assets (6 Jul 2009)
  
• China Nonferrous: China Nonferrous Wins Approval for Terramin Deal (6 Jul 2009)
  
• CIC: China takes minority stake in Canadian miner (3 Jul 2009)
  
• Sinopec: China buys Addax for £4.4bn to tap Iraqi oil (24 Jun 2009)

Seeing Red

SSECI Daily Chart

SSECI value is now above the upper resistance channel. Do you see red packet (angpow) or red flag (danger) coming? Can this happen?

Are you tired of China's love affair with the USD? I love u not (25 Mar 2009)! I have to love u (31 Mar 200)! I love u not (1 Jun 2009), I love u not (26 Jun 2009)! I love u (29 Jun 2009)! Words doesn't mean a thing. Look at what China is trying to do, yuan/local currency settlement with Malaysia, Hong Kong, Russia and Brazil. Will it be successful? Well, every giant leap must begin with the first small step.

Red Alert!

SSEC Daily Chart

Daily chart shows that SSEC is now above the April-June channel. If this break is valid, look out for a rampaging China market! A break above 3000 will confirm a rampaging bull in China.

SSEC Weekly Chart

Weekly chart shows that critical resistance is nearby. 3000 is a difficult hurdle to jump over. Weekly RSI almost overbought. So, don't get too excited yet....

SSEC Monthly Chart

Monthly RSI, MACD and Stochastic all are moving up together. Good sign that the possible bull will be strong.

So, watch out on China play. Will it repeat the 2006-2008 period? I doubt so because so many people got burned. Anyhow, pay attention on China listed stock in HKSE especially those that is only listed in HKSE such as China Mobile (0941.HK). Do you remember the euphoria associated with the SSE listing of Petroch in 2007?