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I am an equity option and futures trader. I have been trading the markets since 1979. More about me on my website
My blog:
Beyond the Chart
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7 Keys to Successful Option Trading
  • Only The Shadow Knows | Wed Night Chinese Takeout | Beyond The Chart 0 comments
    Jan 29, 2014 10:37 PM | about stocks: BIDU, SINA, QIHU, YOKU, DANG

    (click to enlarge)The upheaval around China last week already seems like a distant memory. Remember their disappointing flash manufacturing reading and the concerns about their shadow banking system. Of course at the same time, the currency markets started to go into upheaval. A process that continues into this week.

    The Shadow Knows

    Shadow banking is apparently getting a rescue. A high yield fund called "Credit Equals Gold" was about to go belly up at the end of this month but was rescued at the last minute. This fund had been marketed by Industrial and Commercial Bank of China, one of the largest banks in the world. There is deep concern that if a fund like this went under, the shock waves would have rippled throughout China's financial structure. So who rescued the fund? Only the Shadow knows.

    Other items of interest
    1. The firestorm caused last week by leaks about the tremendous wealth of relatives of Chinese Communist Party leaders is still smoldering. Beijing is forcing a New York Times reporter to leave the country citing visa rules of some sort. This is considered to be part of the punishment against western news agencies.
    2. 'Stop those kids from smoking' says the Chinese government. Maybe they think they are causing air pollution...just kidding. But Reuters does report that China is banning cigarettes from kindergarten, elementary and middle schools. China is the world's largest consumer of cigarettes, and they are recognizing the health risks that come with it.
    3. Speaking of pollution, it was reported that China's smog is finding its way to Los Angeles and the western U.S. In a Bloomberg BusinessWeek article Christina Larson wrote about a study that had been recently released.
    4. Well pollution or not, Chinese families want their families together for the Spring Festival (Chinese New Year). Many are travelling already. I came across an article where a Chinese mom took out a full-page add in an Australian newspaper, asking her son to please come home, saying mom and dad won't force you to get married anymore.
    5. And now just to round out the social side of things...when all the families get together they must be drinking a lot of red wine, as China has now become the largest consumer of red wine in the world. China has overtaken France and Italy to gain this title. Apparently the United States still consumes the most of all types of wine. In China red is a sign of good luck and white means death.

    In tonight's video I am going to re-visit 5 social media stocks: BIDU, SINA, QIHU, YOKU and DANG. DANG is a low-priced but dang it, I just like its name. I think it compares to Amazon in terms of its business profile. They all got hit pretty hard. Only 2 out of 18 Chinese stocks I follow were up today.

    View the video.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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