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If This ETF Keeps Going Up It Means No Global Recession Is Near

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What you are looking at above is one of the major ETF’s for investing in China - ASHR.

I own it, and it looks to be starting a classic stage two bull market, basically in the same position that gold and silver were back in March. The ETF rallied through, and above, its 150 and 200-day moving averages in April and May, pulled back, and so far those moving averages are acting as support. If it clears $25.50 then I’ll take that as strong confirmation that it is indeed starting a new cyclical bull market.

The ETF, closely mimics the Shanghai stock index. FXI is the most popular ETF for China, it is just heavily weighted to a few tech stocks, whereas ASHR is more equally weighted, tracking the CS1 300 Index.

Don’t take your eyes off what happens in China, because this ETF is important. It doesn’t matter if you don’t want to buy it, I understand that, but if the Chinese stock market goes up, it’s economy will grow, and that will be bullish for commodities. It’s had a bear market for almost three years. A rise in China means no global recession is starting this year.

Yesterday, gold dropped about 25 points and silver fell too, closing below $30. After big rallies the past few months, there were sharp drops across the board in various commodities. We have seen profit taking in oil this week after OPEC pledged to maintain it’s production cuts, and a huge drop Tuesday in the Indian stock market after investors took election results there as bad news.

This look like more of the metals consolidation we have seen in the past three weeks.

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Here is a quote for you from someone who was once the the Vice Chairman of the NYSE:

“I can feel it coming, S.E.C. or not, a whole new round of disastrous speculation, with all the familiar stages in order - blue chip-boom, then a fad for secondary issues, then an over-the-counter play, then another garbage market in new issues, and finally the inevitable crash. I don’t know when it will come, but I can feel it coming, and, damn it, I don’t know what to do about it.”

This quote is from Bernard Lasker, who was Vice-Chairman of the NYSE way back when Richard Nixon was President.

He said this in 1972.

It shows you how nothing really changes in the markets.

I just read this quote in a book published in 1973 titled The Go-Go Years by John Brooks. It’s a history of the 1960’s bull market in stocks that ended in a bear market cycle that began in 1968 and ended in 1970.

In 1970, over one hundred stock brokerage firms went under, and Lasker had what happened to the lead up to that bust in back of his mind when he made that statement

When you see the crypto gurus, and people like Cathie Wood, claim we are now in a new era, with all of this technology setting up for unlimited stock market gains, know that they are saying nothing new.

Gurus said that in 2000.

People said that in the 1960’s.

We have meme stocks, you’ve seen busts in dope stocks in the past few years, totally junk crypo coins, SPACs, and so forth.

None of this type of thing is new and now many “AI” stocks are dumping, despite the NVDA stock rise.

No one is talking about that, though, because of the obsession on NVDA, even though "AI” sector ETF’s are badly lagging the market, and have been doing so all year.

We saw one bear market in 2022, but not a bear market yet like that one in 1970, that was so bad it knocked the public out and caused carnage with Wall Street firms and banks, as happened in 1970 and in 2008.

There were two shorter bear markets in the 1960’s, during that secular bull cycle decade, that happened before that final 1970 dump did the the public in.

After that you had a secular bear market in which the market went sideways for a decade, and the trading volume inside the stock market went to nothing, as the public vanished.

You have to look far backward to see far away ahead.

Today it is NVDA!

Long ago it was the “nifty fifty.”

Ultimately there is one chart that I’m watching to confirm of a new bear market when it starts. I talked about it the other day in a post you can find here.

I’m going to do a private WSW Pro members only video soon.

If you haven’t done so yet, go here to upgrade your subscription, so you’ll be able to get the video.


Disclaimer: The opinions expressed in this newsletter are those of WallstreetWindow its editors and contributors, and may change without notice. The information in this newsletter may become outdated and we have no obligation to update it. The information in this newsletter is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. It is provided for information purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor or a group of investors. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. We strongly advise you to discuss your investment options with a financial adviser prior to making any investments, including whether any investment is suitable for your specific needs. WallStreetWindow is owned by Timingwallstreet, Inc. and it is not a registered investment advisor and does not provide individual investment advice. This is a publication for the general public.

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