Chinese Stocks and the Art of War

From the Chinese Stock Market and the book, ‘The Art of War’ (written by Sun Tsu), we learn a valuable principle to be applied to all investing: “All War is Based Upon Deception”.

The markets and their behavior these days leave no doubt that a war is being waged upon average investors. Even institutions battle with each other and scheme to move markets to trap their competitors or throw them off-balance at any opportunity.

china25The China 25 Stock Index has recently completed a nearly perfect act of deception by making some white-knuckle lower lows which led one to ‘believe’ (intentional deception) that a ‘crash’ was imminent.

This was accompanied by numerous, so-called ‘news’ articles maligning China’s Economy and it’s weakness. However, this was pure public relations propaganda.

The chart to the left shows the likely real story. The price deception area is shown in the red rectangle and fooled many a trader and investor.

The intention of this deception is to have traders stand aside in fear and inaction while they take the market still higher. By the way, the etf for this market has the symbol of FXI.

There’s a counter-deception that one must be watchful for as well and, that’s one which will try to simulate a strong market before driving it further downwards. To tell the difference, one needs to observe the prevailing public opinion (which is programmed at great cost by market makers).

The prevailing present news is negative for the Chinese Stock Market, even mocking of anyone who is in this market.

That’s strong confirmation for a market that’s going higher and in favor of the first opinion given in this article. – George

  • May 24, 2015