Direxion Daily China (YINN)

[tw0122]

For the market, the Peoples Bank of China added liquidity to the financial system yesterday — probably buying stocks and bonds to prop up the market.

Shorting China runs the risk of betting against the central bank. That’s never a good idea.

Plus, no one shorting China today is arriving early to the party. No one knows how much lower this can go. The MSCI China is down 26% year-to-date, similar to the Nasdaq, and underperforming the MSCI Emerging Markets Index. The pre-market hours looked good for China early Thursday.

But if China wants to keep locking down, its central bank buying stocks and bonds will be the only thing keeping China interesting and keeping Direxion’s 3x China Bear from a 50% gain before the summer.