Geopolitical and Currency Depreciation Hedge

If the Taiwan Straits or Chinese situation greatly escalates, OTM puts on the China and Taiwan ETFs aren't a bad idea. My preferred vehicle for China is ASHR because it is the Mainland stocks most likely to be hit by sanctions policy. ASHR also opens up potential gains from currency depreciation of the yuan if the dollar takes off. I bought closer to the money for Taiwan, August puts, because as a tech-heavy fund and I think it could slide with the rest of the market. For ASHR, I went way out of the money into October. It is solely a hedge against a major geopolitical escalation that sends the ASHR fund down to near zero before it is suspended, like the Russia ETFs.

USDCNY still looks bullish and I see a similar formation to 2015 on CNYJPY.

Taiwan

FXI probably goes the way of RSX if there is an invasion.

The Beginning or The End for Semiconductors?

The bulls say a new bull market started in March 2020 and some Teradyne cleared its 2000 high, but has since pulled back. Bullish above the blue horiztonal, but I'm bearish on semiconductors and tech in general.

Taiwan Semiconductor. Everyone knows they have a monopoly. Everyone knows theres's a shortage of chips that is ongoing. Chart looks like a correction for now, but below $107.46 the outlook turns decisively bearish in the intermediate-term. Bonus is the Taiwan ETF. TSM is about 22 perecnt of the fund. The top-5 are all tech stocks with about 35 percent of the fund's assets. Tagging aa long-term resistance line.

Finally, the most liquid semiconduictor ETF.

Taiwan ETF Closes At New All-Time High

Taiwan actually isn't so much a China story as a Nasdaq story. The technology heavy Taiwan index is at a new all-time high on the same day the Nasdaq broke its 2000 high.

2009/05/07 News

Light posting lately. I've been studying up on the German hyperinflation (德国恶性通货膨胀) of the early 1920s, and will post about it in future.

Markets are gaining on no news and bad news (stress tests at U.S. banks). China's PMI numbers indicate economic expansion in April, and positive reports from companies such as Alibaba (1688.HK) have helped send the market higher. Optimism is in charge.

On to gold and gold miners:
From the Financial Times: China to continue buying gold

China is likely to buy more gold as a means of diversifying its foreign exchange reserves, after having recently doubled its holdings of the precious metal, the Financial Times reported, citing gold analysts.

The newspaper said analysts believe China will buy gold mostly from domestic producers to avoid pushing international prices higher.

More here:中国将继续增加黄金
Domestic producers include Sino Gold (1862.HK), Lingbao Gold (3330.HK), Zijin Mining (2899.HK), and Jinshan Gold (JIN.TO).

From Caijing:

Zijin Mining Shareholder Cuts Stake
Zijin Mining Group Co, China's largest gold producer, said its second-largest individual shareholder has lowered his stake to 1.72 percent from 2.24 percent.
Ke Xiping sold around 74.8 million Zijin Mining shares between April 27 and May 5.
After the sale, Ke and Hengxing Group, in which Ke holds 95.4 percent, held a combined 4.99 percent of Zijin Mining.

紫金矿业第二大自然人股东减持7477万股

And finally, the big news:

Taiwan and China are planning to permit trading of each others’ shares for the first time as ties improve 60 years after their civil war ended.

A so-called trading platform may list as many as 30 stocks from each market, said Schive Chi, chairman of the Taiwan Stock Exchange. Now, investors are restricted from directly investing in each others’ equities. An agreement on the dual-listing of exchange-traded funds is also expected this year, he said.

iShares Taiwan (EWT)is 65 percent off it's lows this year. The potential gains for Taiwan's economy and stock market are much greater than for China, due to their relative size, but the cross-straits trade will be a boost to the entire region's economy.