China's economy slowed in July. Retail sales barely grew. Investment slumped harder. Every technical analyst on earth saw this data and did exactly what they always do: absolutely nothing.
The world's second-largest economy is grappling with a deepening supply-demand imbalance, which is financial journalist code for "people aren't buying the sh*t factories are making." This is apparently news. Factories make too much stuff, consumers don't want it, prices fall, investment drops. You could teach this cycle to a golden retriever in under ten minutes.
Retail traders read this headline and immediately started Googling "what does supply-demand imbalance mean for my EEM calls." Those calls expired worthless yesterday. The imbalance had nothing to do with it.
Investment slumped steeper than last month, which slumped steeper than the month before. China has been slumping for so long that "slumping" is now just the baseline. Next month they'll report that slumping slumped, and seventeen analysts will upgrade their outlook to neutral.
Here's what matters: none of this data tells you where the Chinese stock market goes next week. It doesn't tell you where it goes tomorrow. It barely tells you what already happened in July, which ended seventeen f*cking days ago.
You want to trade China? Pull up a chart. Draw some lines. Wait for price to do something. The retail sales number is performance art for economics majors who need to justify their student loans.
The world's second-largest economy is reinforcing concerns, which means the world's second-largest economy is doing exactly what it was doing last month while Bloomberg finds new adjectives to describe the same trend. Grappling. Deepening. Slumping. Barely growing. These are not actionable terms. These are Mad Libs for people who get paid by the word.
China's economy could triple tomorrow or collapse into the sea, and your technical setup wouldn't change one f*cking bit.
Photo by Camillo Corsetti Antonini on Unsplash
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