YANG - China Bear Fund 3x leverage

28 thg 4, 2022

There are numerous headwinds to the Chinese economy and normally I would say the CCP would be able to manipulate the mechanisms needed to keep stability, but not this time. This time it is different due to conflicting policies and factors outside of their control.

You have their 0 Cov policy which is causing widespread business disruption as the Chinese vaccine dose not seem effective against omicron and B.A2 variant.
You have them needing to strengthen the yuan due to the dollar ripping higher by selling USD but, they need the dollars to service debts and there is a dollar liquidity crisis which means they need to hold on to every dollar they can.
You have the ag sector not fully recovered from decimating their swine herd due to Swine Fever and crops disrupted due to last year's flooding plus a global fertilizer shortage.
Finally you have it as a bet that an autocratic regime, governed by a single man who has a record of shooting the messenger, to not respond to economic crisis nimbly, imaginatively and effectively.

Entry over the week of 4/25, averaged in at 20.40. Good luck and god speed.

29 thg 4, 2022

Giao dịch đang hoạt động

Stopped out, reentry @ 16.04.
Things that nullify my thesis:
Reversal of 0 Cov policy
Reopening of Shanghai
Beijing out of threat of lockdown
Non infrastructure stimulus
Transfer of power to multiple party leaders

13 thg 5, 2022

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Price staying above the 200 DMA on the daily, a nice bullish sign. We may stay here accumulating for a little bit, until whatever the market says is last straw is added and then we break upwards. Strange times that so much is dependent on 1 individual's psyche.

14 thg 6, 2022

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There is zero reason to be bullish on China's economy so I do not mind holding on until reality catches up to market sentiment. While a $16 entry is not something of wonder, it is close enough to absolute bottom to feel safe waiting for the inevitable trend change.

21 thg 10, 2022

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Added to the trade when it broke resistance @ $18.50. Still very bullish on YANG, the reasons to drop the trade have not materialized:

Housing Mkt, THE mover in the Chinese economy is continuing its steep slide.

No new ideas for fixing domestic, still relying on infrastructure buildout for stim.

No lift in 0 Cov, my take is there will be none due to its underlying reasoning-no effective vaccine with ever increasing variants, a way to keep a lid on inflation, and a way to keep tight domestic control.

No pivot from Xi's core principles, which means a move away from Deng like policies and movement towards Mao like policies and we know how that worked out.

Failing attempts at stopping the Yuan slide against USD means futilely burning up reserves and signaling a coming depegging of the HKD which will mean the Yuan goes straight to shittown.

24 thg 10, 2022

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We're eating surf & turf tonight!
Taking Profit. Sold 2/3rds of the position now that the Hang Seng has puked and letting the last 3rd run. The trade has been a lesson in patience but the CCP did not disappoint.