Reverse China Syndrome: Nasdaq China Index Falls Another 4% On Rout Over China’s Clampdown On Technology (Food Clamdown Coming Next!)

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by confoundedinterest17

This is a China Syndome in reverse.

The Hang Seng Index (HSI) is down another 4%+ today as China continues to clampdown on technology companies, with the regulators taking aim at the food sector today. The HSI is now down nearly 20% after printing an all-time high in February this year. The indices’ constituents are a sea of red with double-digit losses seen in Alibaba Health Info tech (-18.5%), China Feihe (-16.2%), Meituan Dianping (-17.6%) among others. The Hang Seng Tech index has been hit even harder and the recent sell-off has seen the indices lose over 40% this year,

The daily HSI chart shows the recent damage caused by the government crackdown with the index now trading below all three simple moving averages, while the 50-day sma has fallen through the 200-day sma, forming a bearish ‘death cross’. The CCI indicator is flashing an extreme oversold warning, while volatility, measured by the 14-day ATR, is climbing sharply. The multi-month higher low made at the end of last year has been broken with ease today, leaving the October 30 swing-low at 23,961 the next level of support.

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China syndrome” is a term that describes a nuclear meltdown, where reactor components melt through their containment structures and into the underlying earth, “all the way to China”.

The exchange-traded fund at the epicenter of the Chinese tech implosion is seeing record options activity. Open interest in call contracts for the $4.3 billion KraneShares CSI China Internet Fund is surging as the ETF tumbles more than 20% on Beijing’s sweeping regulatory crackdowns. Investors may be betting that the fund’s price is about to bottom, or taking advantage of a spike in volatility to sell the contracts.

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The reverse China Syndrome is that China’s clampdown is bleeding through to other equity markets around the globe.

In related news, CFA Pass Rate Plummets to Record Low of 25% for Level 1 Exam.

Great job college professors!! … NOT!

 

 

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