Sentiment & Analog Call for A-Share Bounce, China Throws in the Towel

Speculators are betting heavily against the current rally and the analog with Nasdaq 2000 (as well as the Shanghai Composite - Dow 1929 analog) both show the market should be entering a bounce period here. It also appears China may dip at the open due to the government abandoning efforts to prop of the market. Government intervention is inherently destabilizing because investors wait for it to end. Now that it is ending, it lifts a weight off the market.

Bloomberg: If the Options Market Is Right, China's Stock Rescue Is Doomed
Options traders have never been so pessimistic on China’s stock market, betting the government’s renewed effort to prop up share prices is doomed to fail.
The cost of bearish contracts on the China 50 exchange-traded fund surged to the highest level versus bullish ones since they started trading in Shanghai six months ago. The so-called skew also climbed to a record for a similar ETF in the U.S., even as government buying drove China’s benchmark index to a 10 percent rally in the final two days of last week.
Sunday night futures look ugly.

ZH: Black(er) Monday Looms: Dow Futures Down 220 After J-Hole Speeches & China Fold

FT: Beijing abandons large-scale share purchases

BBC: China punishes 197 over stock market and Tianjin 'rumours'

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