This week’s episode of Talking Trading features a panel of experts on the panic in the Chinese market and the repercussions for Australian traders. China expert Daryl Guppy takes us through the mechanical problems of the Chinese market and how this resulted in the large sell off. He further discusses Australia’s future in the Asia Pacific Region. We also hear Jonathan Barratt’s thoughts on China and the price of iron ore. And finally Chris Tate in his usual style tells us we are one short of the three stooges running amok in the world financial markets.
Daryl Guppy – CEO of Guppy Traders
China Expert Daryl Guppy lays out 4 mechanical causes of China’s panic:
1)Stocks can only move 10% per day then they get locked limit up or limit down
2) You cannot go short on the Chinese stock exchange
3) Suspension of stocks from trading which means if you have an open position you cannot get out of it
4) Trading is only for 4 hours per day.
What is happening in the Shanghai Stock market in not related to the underlying economy. Although we are seeing a slow down in China the economy is still strong and we will be seeing an aggressive roll out of large-scale infrastructure projects within South Sea Asia and possibly the top end of Australia.
Daryl tells us what he is doing with his positions at the moment and where to seek the opportunities.
Jono’s thoughts on China’s market are they are less of a panic when you are a socialist market economy.
We also hear about the margin call on iron ore and its drop in price.
What we are seeing in China is a conflict between an immature market and runaway leverage.
Their market lost 3.9 trillion last week in wealth, which is larger than the GDP of every country on earth bar the USA, Germany and Japan.
Between China and Greece the two crises in the market at the same time is unusual and is not something Chris would expect to see again in his lifetime. He says we are one short of the trifecta of the three stooges running amok in the world of financial markets.
Chris also shares his perspective on the Aussie market at the moment – moribund and stuffed. He tells traders to go and diversify.
Highlights of Talking Trading are also available on Louise Bedford’s Soundcloud.
Additional Music by Kevin MacLeod http://www.incompetech.com