Will China Bounce?

It already has. How far some stocks could run: Alibaba is about 35 percent below horizontal resistance and 50 percent below downtrend resistance.

Haidilao edged past resistance, but still hasn't competed a base:

Mushroom Cloud Software

Technology advances such that what was once expensive becomes so commonplace one doesn't even think about it. If you are of a certain generation, you may recall "Game & Watch" versions of Super Mario or other popular games that were simplified versions on cheap LCD screens:

Today, there is a "Game & Watch" with Legend of Zelda games, the complete versions that ran on game systems such as the Nintendo and Super Nintendo.

In software, what was once expensive becomes cheap or even free. Nintendo's games and characters survive because they are copyrighted, but more importantly, popular. If another could make Mario games, Nintendo would be in deep trouble.

In the case of productivity software, the most important function is the task itself, which cannot be copyrighted or patented. "Paying a bill" is not a patenable function. Some have tried, like Amazon patenting "buy with one click," but that is more evidence of USG corruption than a repeatable busines model. Moreover, the shift to the cloud makes switching software easier than ever. If blockchain realizes its potential, consumers will gain more control over their data, forcing companies into greater competition for customers.

Many software and platform companies are valued on their platforms. Their growth is a function of the customer base growing into the future and collecting more dollars from their users. Instead, most are headed into a future similar to Docusign. Innovative to start, how much should it cost to digitally sign a document? What's to prevent competition? This is the classic case of a company built on a feature that will ubiquitous and free. The market has already figured out that day is coming:

I haven't done a deep dive into software companies. That is for after the decline, when picking the survivors will deliver great profits. For the foreseeable future, most companies will suddenly be valued as if Docusign's fate is their future.

Regulatory Pain for Alibaba, Tencent may Not Be Over

Global Times: CPC’s disciplinary agency renews anti-corruption drive, to fight new challenges of ‘capital-power collusion’

The Communist Party of China's (CPC) top disciplinary agency pledged to maintain a strong and persistent crackdown on corruption in a communiqué released Thursday, and the document also said the Party will actively handle "the new challenges and new situations" of the anti-corruption campaign, including strengthening investigations and punishment behind the "disorderly expansion of capital" and monopoly of some online platforms, vowing to cut off the collusion between capital and power.

The communiqué also stressed that the corruption behind "disorderly expansion of capital" and monopoly of some online platforms should be investigated and punished, and the ties between political power and capital should be cut off.

Zhu said this is a new challenge which emerged in the past 10 years, as the fast development of China's economy has brought huge changes in social media networks, IT industries and digital economy, and some capitalists have gained unprecedented influence as some of their products have become the key parts of public goods of the nation.

Without strict law-enforcement and legislation that keep up with the times, there will be vast space for corruption and misconduct, and the ambition of some capitalists will expand to gain political power and undermine the socialist nature of our country, said analysts.

"The capital is showing its intention to cross the line," said Wu Xinwen, a professor and expert on Chinese politics at Fudan University in Shanghai, noting that some capitalists are no longer satisfied with only having economic power, but intend to expanding their influence to public media and education to eventually gain political power, and without restrictions and management, the capital could overrun politics and society in China.

Although the lines are drawn differently, U.S. tech companies are also engaged in violation of political and economic norms, the latest being Google's abuse of its ad system.

New Year, Same Story: China Crackdown on BigTech Finance

More of the same is coming for BigTech companies trying to push into the financial sector.

January 2021: PBOC Vows to Step Up ‘Prudential Oversight’ of Online Platforms

December 2021: 重磅！央行开始动手了，哪些主播被禁止卖金融产品？

Improve the Internet financial supervision system

The central bank and other relevant departments pointed out the three major necessity for the formulation of the "Measures" in the drafting notes.

The first is to implement the Party Central Committee's decision and deployment on anti-monopoly and preventing the disorderly expansion of capital.

With the vigorous development of the digital economy, social production and lifestyles are changing from production-oriented to demand-oriented, and customers and data resources have become important means for implementing monopoly in the era of digital economy.

Some Internet platform companies take advantage of online scenarios and reach customers to conduct financial business by participating in financial institutions or cooperating with financial institutions. There are some violations in the marketing of financial products, infringing on the rights and interests of financial consumers, and repelling and restricting fair competition. There is an urgent need to formulate policies and systems to regulate the online marketing of financial products.

The second is to protect the safety of people’s property.

Judging from the practice of Internet financial supervision in recent years, problems such as selling illegal financial products to financial consumers or inducing financial consumers to buy financial products that do not match their financial status and risk-bearing capacity are more prominent, which infringes on the people’s property safety .

Preventing and disposing of related risks are related to the vital interests of financial consumers. We must strengthen the supervision of financial institutions and Internet platform companies from the source link of financial product marketing.

The third is to improve the Internet financial supervision system.

In recent years, financial management departments have continuously explored and strengthened the supervision of online marketing of financial products. Relevant behavioral norms and management measures are scattered in the regulatory systems of Internet loans, Internet insurance, Internet fund sales and other fields. At present, there is still a lack of relatively systematic and unified supervision. Management System.

In addition, the Internet platform cooperates with financial institutions to carry out financial services, mainly to provide financial product marketing and customers' personal credit information services. The newly issued "Credit Investigation Business Management Measures" has included personal credit information services in the scope of supervision, and further measures are needed. Strengthen the supervision of online marketing and complete the system puzzle.

The reporter noted that the chaos of Internet marketing has already aroused the attention of regulatory authorities. In the past two years, the Beijing Banking and Insurance Regulatory Bureau, Chongqing Banking and Insurance Regulatory Bureau, Qinghai Banking and Insurance Regulatory Bureau and other local regulatory bureaus have issued consumer risk warnings on related chaos in the fields of Internet insurance insurance, insurance live marketing, and financial consumption on Internet sales platforms.

Oh BABA

ALibaba filled its gap. Next move in either direction will be a doozy. Secdon chart is inverted to show how it looks like a cup-and-handle that I'd be up for buying...so in this case I think the next big move is lower. Shorter-term, a bounce is possible.