Before The Bell-CHINA Update YINN Jan 31st

On January 10th I posted this chart of the CHINA Bull ETF YINN and recommended taking a long position.

The bullish recommendation was based on a Bloomberg report indicating that China's stocks regulator will begin pushing pension funds and housing funds into the capital markets.

On Balance Volume also backed up this trade with a parabolic upside move; indicating some insider knowledge of this government action before the press release.

My Jan 10th conclusion read:

Just like with the US Fed QE and Twist Interventions, in the short run, some upside easy money can be made. Just don't stick around the after party celebration too long.

Here is a weekly chart of YINN as of the close Jan 30th. The stock has moved 30% in our favor since Jan 10th.

Notice the horizontal line drawn from left to right, clearly identifies the previous support level at $25, now resistance until proven otherwise.

The daily chart is showing a Bearish Harami, I believe this pattern will be denied today. The %B indicator is diverging, and the over all pattern of trend is down.

Conclusion: Recommend taking the 30% profit by the end of this week; I believe the broader downtrend pattern will hold and CHINA will once again resume its downward trajectory.

Expect the shares to reach $23-25 range, but doubt their ability beyond that. I am looking for a failure at this level, and will look to get short CHINA once confirmed.

Tim Kathlina

AFTER THE BELL-BULL AND BEAR DOJI PATTERN SET-UPS JAN 12TH

DOJI:
The appearance of a Bearish/Bullish (Doji) Star Pattern in an uptrend/downtrend shows that buyers/sellers are now losing control and the market is moving to a deadlock between buyers and sellers. This deadlock or balance between buyers and sellers may result because of a diminution in the buying force or an increase in the selling force. The star tells us that the strength of uptrend/downtrend is now dissipating and the market is increasingly vulnerable to a setback/advance.

Conclusion: These patterns require follow thru confirmation. Note however, Transports, large caps, mid-caps are all backed up by low RSI<2> readings.

As noted in yesterdays Semiconductor post, I believe Intel earnings report will bring in a short term top of some sort. Either an exuberant exhaustion style high, based on good numbers, or a disappointment ceiling, based on bad numbers.

The question remains, will this be the high of the year????? Not sure yet.

Tim Kathlina

Before The Bell-CHINA Intervention Bernanke Style YINN and YANG Jan 10th

In order for stocks to be in a bull market, Central Banks have to step in and force the people to purchase shares buy destroying all other investment avenues. The Ponzi system is so roted with debt and fraud, natural market mean revisions must be avoided at all cost. Today, according to ZeroHedge report, CHINA bankers have come out swinging:

Bloomberg report on what is about to take place in China: "China’s stocks regulator will “actively” push pension and housing funds to begin investing in capital markets, and encourage long-term investors such as insurers and corporate pension plans to buy more shares."

This first chart is YANG, etf short China. I have circled a clear DOJI pattern; which in normal circumstance being at the bottom of the BBands, would begin to peak my buy interest. DOJI is defined as:
Doji is a particular signal showing indecision about the direction of the market and it represents a tug of war between buyers and sellers.

So, in other words, what was a strong downtrend, found an equal footing between buyers and sellers, or price discovery. But after today's CHINA news, forcing retirement funds to buy over leveraged, worthless stocks, it doesn't take to much guess work to see which way this will be resolved.

YINN is the bull etf for China. The last two candles formed a Bullish Homing Piegon, defined as:

The Bullish Homing Pigeon Pattern is a signal of disparity. In a market characterized by downtrend, we first see heavy selling reflected by the long, black real body of the first day. However small body of second day points out to diminished power and enthusiasm of the sellers thus suggesting a trend reversal.

In this case, the "diminished power and enthusiasm of sellers" is being forced by Ponzi scheming Bankers who are intent on beating the house; the house being the natural order of markets.

Conclusion: CHINA has long been building bridges to nowhere, lavish cities with no residents, and the largest shopping malls in the world with no shoppers. Over the last year however, the gig was finally up and the natural order of market mean revision has begun.

Just like with the US Fed QE and Twist Interventions, in the short run, some upside easy money can be made. Just don't stick around the after party celebration too long.

Tim Kathlina