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High in the mist-shrouded Himalayas, a winding mountain road opens to a clearing in the pine forested valley, revealing rows of uniform Tibetan-style houses, each topped with a Chinese flag.

Construction is booming in this remote place. Piles of logs and other building materials line the road. On a nearby hillside, cranes tower over rising housing blocks.

“They are building resettlement houses here,” says the Chinese travel vlogger who captured these scenes last year, speaking into his phone on a roadside. “When people live and settle here, it undeniably confirms that this is our country’s territory.”

But the village – known as Demalong and formally founded in March last year with a community of 70 families, according to a government notice seen in the footage – is not only located in territory claimed by the world’s ascendent superpower.

It is one of a string of Chinese settlements that also fall well within the border shown on official maps of Bhutan – a Buddhist kingdom of fewer than 1 million people that’s never agreed on a formal international border with China.

For centuries, herders looking for summer pastures were the main presence in this harsh and inhospitable region some 14,000 feet (4,200 meters) above sea level in the eastern Himalayas. But now, there is a growing population as the Chinese government incentivizes hundreds of people to settle there from across Tibet, the region of China that borders Bhutan.

Those settlements show another, quieter front in China’s expanding efforts to assert its control over disputed, peripheral territories – also playing out in the South and East China Seas – as Chinese leader Xi Jinping seeks to bolster national security and enhance China’s position over its rivals.

Bhutan and China have been holding yet-unresolved border talks for decades. Looming in the backdrop of those discussions is India, China’s biggest regional rival and Bhutan’s close diplomatic ally.

The nuclear-armed neighbors have previously gone to war and more recently engaged in a series of skirmishes over their disputed 2,100-mile (3,379-kilometer) border, which straddles Bhutan – and, in Beijing’s eyes, makes the small Himalayan nation all the more critical to its national security.

A comparison of China’s official map of the Tibet Autonomous Region and Bhutan’s national map published in its 2023 Statistical Yearbook show this development is located in territory claimed by both countries.

Bhutanese authorities, however, have repeatedly rejected previous reports of Chinese encroachment, including in a foreign media interview last year when then-Prime Minister Lotay Tshering “categorically” denied that China had been building in Bhutan’s territory.

Satellite images show the expansion of Chinese development in the Jakarlung valley between August 2020 and August 2024. Planet Labs
Satellite images show the expansion of Demalong village between December 2021 and January 2024. Planet Labs

“The map of Bhutan covering the northern border will be finalized in accordance to the demarcation of the Bhutan-China border,” the ministry’s statement said. It also pointed to the two countries’ boundary talks and said Bhutan was “confident that the northern border will be finalized in the near future.”

“China’s construction activities in the border region with Bhutan are aimed at improving the local livelihoods,” a ministry statement said. “China and Bhutan have their own claims regarding the territorial status of the relevant region, but both agree to resolve differences and disputes through friendly consultations and negotiations.”

The construction has taken place in border regions in northeast Bhutan and the west of the kingdom – near the disputed border between India and China, according to the research. The findings, also described by Barnett in The Diplomat, add to his 2021 Foreign Policy magazine report on earlier construction in the same northern area – and document what the latest research describes as a new “surge” in building there since early last year.

High-altitude rivalry

The blurry boundaries through the Himalayan peaks and plateaus separating China and its southern neighbors are often relics of imperial era agreements and nomadic routes – now charged with the nationalist rhetoric and military might of New Delhi and Beijing.

Landlocked by both, Bhutan has long navigated carefully between India – its largest development and trading partner, which until 2007 effectively controlled its foreign policy – and China, an economic and military giant with whom it has no formal diplomatic ties.

Bhutan’s place in their dispute was thrown into the spotlight in 2017, when the kingdom accused the Chinese army of building a road “inside Bhutanese territory” in the Doklam area, near a strategic and disputed junction between all three countries along Bhutan’s west.

Then, Indian troops moved into the area to block China – sparking a tense, 73-day standoff that threatened to pitch the rivals into conflict.

Though not part of India’s territorial claims, Doklam is close to the so-called “chicken’s neck,” or Siliguri Corridor, a vital artery between New Delhi and its far northeastern states. China claims Doklam has been its territory “since ancient times.”

Ultimately diffused, the incident was one more reminder for Beijing of the volatility of the unresolved border.

India and China reached an agreement on military disengagement along a section of their disputed border earlier this month – in a step toward easing tensions there.

However, strengthening its position in that rivalry has been a driving force for Beijing, experts say, as it extends its foothold in lands traditionally claimed by Bhutan – and enlists its citizens to relocate there to press its counterclaim.

“Knowing India has a strong presence in Bhutan, China naturally becomes vulnerable in the bordering region,” said Rishi Gupta, assistant director at the Asia Society Policy Institute in New Delhi.

“This vulnerability compels China to enhance its influence in Bhutan and assert its territorial claims more aggressively, seeking to counterbalance India’s strategic partnerships in the area.”

One year prior to the 2017 standoff, Beijing was already starting a major bid to bolster its claims by building roads and villages in the Jakarlung valley – along another China-Bhutan frontier far to the northeast of Doklam.

The buildup follows what observers say were long-standing efforts by China to convince Bhutan’s leaders to cede their claims in the west around Doklam – in exchange for Beijing giving up its claims to the northern areas.

In 2016, China founded Jieluobu, its first official village in the Jakarlung valley. Two years later, Jieluobu was branded a model “border xiaokang village” – one of hundreds of such villages built or upgraded in recent years along China’s western and southern frontiers.

The “xiaokang” – or “moderate prosperity” – villages along China’s borders have been billed as part of Beijing’s scheme to eradicate poverty and improve living conditions in its far-flung frontiers.

But experts say these villages are also part of Xi’s vision to use civilian settlements to solidify control of China’s border, amid perceived threats of foreign encroachment and infiltration – and a growing obsession with security.

“Only when there are people can the border remain stable,” the leader is often quoted as saying by officials in frontier regions.

By 2022, more than 600 “border xiaokang villages” – including Jieluobu – had been completed in Tibet, boosting its border population by 10.5%, the regional government said in its annual work report.

“It is no doubt that the villages are aimed to strengthen China’s territorial claims and control of the border regions, especially the disputed areas,” said Yun Sun, director of the China program at the Stimson Center think tank in Washington.

“Once the Chinese villagers are there, China has causes for stationing troops and performing administrative control. The strategy has a long history in China, tracing back as early as the Han dynasty,” she said.

No place anybody would choose

Chinese construction that began in the Jakurlung valley in 2016 has ramped up since last year relative to earlier periods, according to the research by SOAS’s Barnett, based on satellite imagery.

As of this summer, more than 2,000 residential units – estimated to have space for thousands of people – had been built in multiple settlements across both areas, according to the report.

That buildup has also been supported by an expanding network of roads, which geointelligence researcher Damien Symon says have progressed south from China into Bhutan over recent years.

“None of the roads connect into Bhutan, they start from the Chinese border and end in forest areas. There is no connectivity to existing Bhutanese roads or villages,” said Symon, of analysis collective The Intel Lab, who in a December 2023 report for London-based think tank Chatham House tracked new Chinese construction “across the contested border with Bhutan” in the north.

Road access is crucial for new settlements in the Jakarlung valley, which Chinese reports say used to be cut off from the outside world by heavy snow for half the year.

“These are not places anybody would normally choose to relocate to, because they are either extremely high or extremely exposed to the elements,” Barnett said.

To populate the cold, damp valley, officials in Tibet entice settlers from across the region with spacious new homes and generous subsidies.

In Jieluobu, the Tibetan herders moved into two-story houses with courtyards. Residents aged 16 and older are eligible for an annual subsidy of more than 20,000 yuan (about $2,800), state media reported.

Patriotic education is part of everyday life in Jieluobu. In 2021, the village held 150 study sessions on Xi’s speeches, party policies and history, Mandarin Chinese and border defense, state media reported. Since then, the village has also undergone a major expansion.

Meanwhile, in the southeastern part of the valley, Demalong has added 235 new homes since last year and aims to build a kindergarten and a clinic, according to government statements. It also has a military compound, the travel blogger’s video shows.

Since late September, a new wave of residents has moved into Demalong, Jieluobu, Semalong and Qujielong from as far as Nagqu, a city in northern Tibet some seven hours’ drive away, according to a local government notice and videos shared by relocatees on Chinese social media.

The new families, arriving in long columns of vans, coaches and trucks escorted by police cars, were greeted by red banners and traditional Tibetan dances, social media footage shows.

‘No intrusion’

Bhutan has repeatedly denied that Chinese construction has taken place in its territory.

Asked in March last year about reports of China building in the kingdom’s north, then-Prime Minister Lotay Tshering told Belgian outlet La Libre, “We are not making a big deal of it because it’s not in Bhutan.”

“We have said categorically that there is no intrusion as mentioned in the media,” he said. “This is an international border and we know exactly what belongs to us.”

In a separate interview with India’s The Hindu about six months later, the former prime minister, whose government was replaced in elections earlier this year, reiterated that “there are no real differences between China and Bhutan, but there is an un-demarcated border dating back to Tibet-Bhutan ties,” referring to the period before Tibet’s 1951 official annexation by Beijing.

As early as 2020, Bhutan’s ambassador to India said there was “no Chinese village inside Bhutan,” following Indian media reports about such development in the kingdom’s western borderlands.

That appears to be in sharp contrast to recent decades when Bhutan repeatedly protested what it claimed were incursions into its territory by Chinese soldiers and Tibetan herders. In 1997, Thimphu told Beijing that Tibetan herdsmen had been intruding into the Jakarlung valley and even constructed sheds there, according to Bhutan’s National Assembly records cited by Barnett.

In a 1998 pact, the two countries agreed to maintain the status quo in the border region as they continue talks to resolve the “boundary question.”

Observers say Bhutan’s rhetoric on this issue has become increasingly opaque in recent years, and some wonder whether the kingdom’s muted comments are because it’s already reached a tacit understanding with China to give up some territorial claims.

Others suggest Bhutan’s priority may be to keep relations stable so they can finally reach a deal – with the potential to ease the uncertainty of the countries’ power imbalance and bring the economic benefits of normalized ties.

“Most Bhutanese would love to see the borders demarcated and settled and a new chapter of friendly relations with China,” said Bhutanese scholar Karma Phuntsho.

But while Bhutan remains “keen to solve the border issues with China,” the remote border areas have little impact on Bhutanese peoples’ livelihoods, so, “the countries are taking time to reach the best mutually beneficial solutions,” he added.

Other observers take a more pointed view.

The Bhutanese “have realized that they have no way in which they can get back anything which the Chinese have occupied, and they lack the capacity … to police the border, let alone the military capacity to retrieve anything from the border,” said Manoj Joshi, a distinguished fellow at the Observer Research Foundation in New Delhi.

“So at one level, they have taken the position that they will try and resolve the border issue … pending that settlement, they don’t want anything to come up.”

Despite the negotiations over the decades, the kingdom has already shed land to China.

Bhutan’s official maps have lost a parcel of land to its northwest and the Menchuma valley and plateau in its northeast, according to Barnett. That northwest parcel, which includes Kula Kangri mountain, is often cited as covering some 400 square kilometers (154 sq miles).

“These areas fall north to the traditional boundary between Bhutan and China,” its statement said.

In 2021, Bhutanese and Chinese officials agreed to a “road map” to expedite settling their border. They picked up formal talks last October for the first time since the Doklam standoff, with Bhutan’s foreign minister making a rare visit to Beijing.

There, Chinese Foreign Minister Wang Yi assured counterpart Tandi Dorji that Beijing was ready to “fix and develop China-Bhutan friendly relations in legal form.”

Regardless of how each side defines the location of these developments, they appear to be part of a long-term plan for China to strengthen its position and apply pressure along the yet un-demarcated border.

This year, a local government chief from a county in Tibet has visited the villages in the Jakarlung valley at least twice to inspect construction projects and check in with residents.

During a visit in April, the official reminded local cadres and residents of their mission.

“(We’re) lacking oxygen but not spirit, enduring hardship without fear, overcoming higher altitudes with an even higher sense of purpose,” he said, quoting a 2020 speech by Xi.

This post appeared first on cnn.com

Homeowners in France have discovered a skeleton in the attic of an outbuilding while undertaking renovation work.

The body is thought to belong to the former occupant of the property, which is located in Erstroff in eastern France, who disappeared in 2009, according to a statement from the local prosecutor’s office published Monday.

It appears that the man took his own life, as a rope was found attached to a beam near the body, which was found on Saturday in an outbuilding adjoining the main house.

The remains were found in a small room immediately under the roof accessible only by a trapdoor that was “almost invisible,” according to the statement.

The discovery is thought to be linked to the former owner, a man born in 1927, who disappeared in 2009.

No trace of him was found despite a police investigation, which was eventually closed in 2016. In December 2021, he was declared legally dead by a local court, the statement added.

The remains have now been sent to the Strasbourg Institute of Forensic Medicine, which will undertake an autopsy and confirm the identity of the dead person using DNA from surviving family members.

This post appeared first on cnn.com

A Nigerian court freed 119 people including minors on Tuesday, after the authorities dropped charges against them arising from deadly protests in August against economic hardship.

The accused had faced charges including treason and inciting a military coup and had been arraigned in batches of 76 and 43 last Friday. One of the charges carried the death penalty.

President Bola Tinubu on Monday ordered the release of all minors detained during anti-government protests in August and dropped the charges against them.

“The case has been struck out and the 119 protesters have been released,” Deji Adeyanju, counsel to the protesters, told Reuters.

“Now we are asking for their rehabilitation and compensation by their various state governments.”

The country’s attorney general took over the case from the police and dropped the charges after bringing forward the matter due to be heard in January.

This post appeared first on cnn.com

Israeli Prime Minister Benjamin Netanyahu has fired Defense Minister Yoav Gallant after months of clashes over domestic politics and Israel’s war efforts.

In a recorded statement Tuesday evening, Netanyahu said that “trust between me and the minister of defense has cracked.”

Israel Katz, currently the foreign minister, will become defense minister. Gideon Sa’ar will replace Katz as foreign minister, the prime minister’s office said Tuesday. Neither has extensive military experience, though Katz has served in the cabinet throughout the war.

The move came as voters in the United States, Israel’s most important ally, voted for their next president. Gallant is a close interlocutor for the US administration, and has been said to have daily conversations with US Defense Secretary Lloyd Austin.

The reshuffle also comes as Israel awaits a potential retaliatory attack from Iran.

Gallant responded to the decision shortly after it was made public, posting on X that the “security of Israel has been and will always be my lifelong mission.”

Netanyahu said that he had “made many attempts” to bridge differences with Gallant, but that they “kept widening” and “came to the public’s knowledge in an unacceptable manner.” He continued: “Worse than that, they came to the knowledge of the enemy – our enemies enjoyed it and greatly benefited from it.”

Minutes after Netanyahu made the announcement, opposition leaders called for Israelis to take to the streets in protest. Protestors outside Netanyahu’s residence in Jerusalem shouted “shame!” In Tel Aviv, families of hostages held in Gaza chanted “Bibi is a traitor,” using the prime minister’s nickname. When Netanyahu first sought to fire Gallant last year, over his opposition to proposed judicial reforms, it led to mass nationwide demonstrations.

Israel’s political class has long speculated that Netanyahu would fire Gallant and replace him with a political ally to shore up his domestic power. Netanyahu has struggled to maintain a hold over his fragile governing coalition, a muddle of competing interests, whose collapse could spell the end of his leadership.

Clashes over the war and domestic politics

The relationship between both men was rarely cordial and often caustic. There was little love lost between them – over the state of negotiations with Hamas, Israel’s military strategy and Netanyahu’s bid to bring in a sweeping overhaul of the judiciary in 2023.

Netanyahu and Gallant have often disagreed over the war in Gaza. In August, Gallant told a closed-door Knesset committee that Netanyahu’s goal of “absolute victory” in Gaza was “nonsense,” according to Israeli media. Netanyahu then took the extraordinary step of releasing a press statement accusing Gallant of adopting an “anti-Israel narrative.”

Gallant was also highly critical of Netanyahu’s emphasis on controlling the Gaza-Egypt border, known as the Philadelphi Corridor. He said that prioritizing its control over a ceasefire and hostage deal was a “moral disgrace.” In the cabinet, he voted against continued occupation there. “If we want the hostages alive, we don’t have time,” he said.

But it may be domestic politics that ultimately played the biggest role.

Netanyahu on Tuesday was forced to withdraw draft legislation that would have allowed ultra-Orthodox Israelis to get government subsidies for daycare even if the father of the children does not serve in the Israel Defense Forces, as all other Jewish Israelis must do. Netanyahu relies on ultra-Orthodox parties to govern, and they have threatened to upend his coalition if they are forced to serve in the military en masse.

Gallant had been outspoken against the idea that ultra-Orthodox Israelis be exempt from service, saying that “the security system under my leadership will not submit it to legislation.”

Sa’ar, whom Netanyahu has tapped for foreign minister, is thought to be an influential interlocutor to the ultra-Orthodox parties. Netanyahu, in his statement, said that Sa’ar’s appointment “will enhance the stability of the coalition and the stability of the government, and these are very important at any time, but especially at wartime.”

Also on Tuesday, Israeli police announced that a criminal investigation had been opened “concerning events at the outset of the war,” without offering further details.

Gallant has repeatedly called for an official inquiry into Hamas’ October 7 attack. It is the second investigation this week that threatens to ensnare Netanyahu. On Sunday, a court revealed that police had arrested a top Netanyahu aide for allegedly leaking classified and faked intelligence to foreign media.

Netanyahu had faced pressure from far-right members of his cabinet to dismiss him, with National Security Minister Itamar Ben-Gvir saying in September that he had been demanding Gallant’s ouster for months “and the time has come to do so immediately.”

His relationship with Gallant deteriorated when the prime minister threatened to fire him in March 2023, after he criticized the government’s judicial overhaul legislation. The bill, which provoked widespread popular protests in Israel, would have granted the ruling coalition more sway in selecting judges.

Gallant was the first minister to oppose it, saying: “The deepening split is seeping into the military and security agencies – this is a clear, immediate and real danger to Israel’s security. I will not facilitate this.”

Netanyahu said he would fire the defense minister, but reversed his position following pressure. The rancor between the two men has persisted and grown since the Hamas attack last October.

This is a developing story and will be updated.

This post appeared first on cnn.com

A series of Israeli raids and airstrikes in towns and villages in the occupied West Bank that stretched overnight from Monday into late Tuesday have killed at least eight people, according to Palestinian authorities and local residents.

Qatari-owned Al Araby TV alleged that Israeli fire in Qabatya also injured a Palestinian employee working there. Rabe’e Al-Munir, a photojournalist, is now hospitalized in stable condition, it said.

The bloodshed comes as violence surges in the West Bank, where the Israeli military has intensified incursions following the Hamas-led October 7 attacks.

Since October 7, 2023, Israeli troops and settlers have killed at least 775 Palestinians, including 167 children, in the occupied West Bank and Jerusalem, the Palestinian health ministry reported on Tuesday.

Earlier on Monday, Israeli settlers vandalized and set fire to vehicles in the city of Al-Bireh, in what Ramallah governor Laila Ghannam warned “could have ended in a massacre.”

The West Bank, a territory that lies between Israel and Jordan, is home to 3.3 million Palestinians living under Israeli military occupation, as well as hundreds of thousands of Jewish Israelis who began settling there some 57 years ago.

In total, nearly 1,600 settler attacks against Palestinians have been recorded since October 7, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) said on October 31.

This post appeared first on cnn.com

As the election results roll in and America holds its breath, Chinese state media hasn’t missed the chance to accentuate US political polarization – and play up the threat of post-vote turmoil in its democratic superpower rival.

Beijing has long bristled at Washington’s criticism of its one-party authoritarian rule. Under leader Xi Jinping, who has cleared the way to rule for life, its mouthpieces have increasingly scoffed at the American political system and liberal democracy.

In a string of election day news reports and commentaries, state media has attempted to portray the vote as a reflection of deep social divisions and political dysfunction in the United States, amid broad sentiment in China that no matter who wins, tense bilateral ties are unlikely to improve.

“US Election Day voting begins amid fears of violence, unrest,” declared a headline in nationalist tabloid Global Times.

On state broadcaster CCTV, a reporter’s dispatch from Washington, DC focused on boarded up businesses, increased police patrols and metal fences erected around the White House and Capitol Hill to “prepare for the worst-case scenario of chaos,” while playing down the millions of people peacefully exercising their democratic rights.

“The US election, once considered a highlight of the so-called ‘beacon of democracy,’ may now become the starting gun of ‘social unrest,’” the state-run Beijing Daily claimed in a commentary on social media.

“The election feels like theater, filled with controversies. The root lies in the extreme polarization and division between the two parties, which has already created a sharply divided electorate.”

On Chinese social media, the US election featured high among the trending topics throughout Tuesday and Wednesday. On microblogging site Weibo, a popular quip goes: “The country is so divided, they might as well break into US-A and US-B.”

But for many Chinese watching the run-up to the vote, the focus was more on spectacle than substance – with a sense that no matter who wins, the tensions of the US-China relationship will remain.

Part of the reason for that may well be a consensus in China – from policymakers down to regular citizens – that the die is cast for a US administration that wants to constrain China’s rise on the global stage, regardless of whether Vice President Kamala Harris or former president Donald Trump wins.

Trump’s last term saw the Republican slap tariffs on hundreds of billions worth of Chinese goods, launch a campaign against Chinese telecoms giant Huawei and use racist language to describe the virus that causes Covid-19, which was first identified in China.

The past four years under President Joe Biden have seen a tone shift and effort to stabilize communication. But US concern about China’s threat to its national security has only deepened, with Biden targeting Chinese tech industries with investment and export controls, as well as tariffs.

Biden has also appeared to sidestep long-standing US policy in voicing support for Taiwan – a “red line” issue in the relationship for Beijing, which claims the self-ruling island democracy as its own.

“(It) doesn’t matter who it is (that wins),” one social media user wrote in a popular comment on Weibo. “Their containment of China won’t ease.”

This post appeared first on cnn.com

Boeing machinists approved a new labor deal Monday, ending a more than seven-week strike that halted most of the aircraft production at the company that was already struggling with mounting losses.

Machinists voted 59% in favor of the new contract, which includes 38% wage increases over four years and other improvements.

The approval is a relief for Boeing’s new CEO Kelly Ortberg, who took the top job in August to steer the company through its safety and manufacturing crises.

President Joe Biden congratulated the union and the company — one of the country’s top exporters — on reaching the deal. Acting Labor Secretary Julie Su had gotten involved with the negotiations, meeting with both sides.“This contract provides a 38% wage increase over four years, improves workers’ ability to retire with dignity, and supports fairness at the workplace,” Biden said in a statement. “This contract is also important for Boeing’s future as a critical part of America’s aerospace sector.”

It was the machinists’ third vote since September, when the 33,000 workers, mostly in the Seattle area, walked off the job after overwhelmingly rejecting a proposal promising a 25% raise, far short of the 40% the union sought. They rejected another sweetened proposal late last month.

“This is a victory. We can hold our heads high,” said International Association of Machinists and Aerospace Workers District 751 President Jon Holden as he announced the results late Monday.

The machinists, who build planes such as the bestselling 737 Max, 777 and 767 aircraft must return to their jobs no later than Nov. 12 the union said. They could return as early as Wednesday.

Boeing said machinist pay will average $119,309 at the end of this contract proposal. The first wage increase will be 13%. The contract also increases 401(k) contributions and a signing bonus of up to $12,000 or a combination of a $7,000 bonus and $5,000 401(k) deposit.

Workers had complained about the skyrocketing cost of living in the Seattle area, where most of Boeing’s aircraft are produced.

But the union had warned that the latest deal, which was proposed last week, might be as good as workers can expect to get.

“In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor,” the International Association of Machinists and Aerospace Workers District 751 said in a statement then. “We are at that point now and risk a regressive or lesser offer in the future.”

This post appeared first on NBC NEWS

In this StockCharts TV video, Mary Ellen reviews the negative price action in the broader markets while highlighting pockets of strength. She shares how the rise in interest rates is impacting the markets ahead of next week’s FOMC meeting. Last up is a segment on how to use longer term charts to uncover long term winners and ride out short term volatility.

This video originally premiered November 1, 2024. You can watch it on our dedicated page for Mary Ellen on StockCharts TV.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

In this video from StockCharts TV, Julius begins by looking back at the completed monthly bars for October to assess the long term trends in the 11 S&P sectors. He follows that up with an updated view for SPY in coming weeks. After that, Julius looks forward using seasonality to find sectors that have strong seasonal tendencies and overlays them on a Relative Rotation Graph, in order to see whether these seasonals are aligning with current relative trends.

This video was originally published on November 1, 2024. Click anywhere on the icon above to view on our dedicated page for Julius.

Past episodes of Julius’ shows can be found here.

#StayAlert, -Julius

There is only one way to trade in a long-term uptrend: long. Forget about picking tops and breaks below short-term moving averages. Leaning bearish within a long-term uptrend is not a profitable strategy. Instead, we should lean bullish and use oversold conditions to our advantage.

In a long-term uptrend, I am only interested in oversold conditions because these provide setups to trade in the direction of the bigger trend. I ignore overbought conditions because it is normal to become overbought in an uptrend. Oversold conditions, on the other hand, occur after a pullback and this is an opportunity to partake in the long-term uptrend.

The chart below shows SPY with two momentum oscillators: RSI(10) and %B(20,2). I am using both to identify oversold conditions in a long-term uptrend. SPY is well above its rising 200-day SMA (blue line) so the long-term trend is clearly up. %B tells us the location of the close relative to the Bollinger Bands. The indicator dips below 0 when the close is below the lower Band and this is an oversold condition. RSI becomes oversold with a dip below 30.

On the chart above, we can see %B becoming oversold in mid April, late July and last week (green shading). RSI became oversold in mid April and early August, but has yet to become oversold here in early November. On the price chart, notice that SPY is trading near its 50-day SMA (pink line). Prior dips below the 50-day SMA marked pullbacks within the bigger uptrend, not the start of a bigger trend change.

Oversold conditions are not the signal. Oversold conditions simply serve as an alert to be on guard for a short-term reversal. Keep in mind that price can become oversold and remain oversold. Chartists, therefore, need a bullish catalyst to signal a change from oversold to strength. For RSI and %B, we can use their centerlines to identify an upturn in momentum. The chart below shows these centerlines as short red lines (50 for RSI and 0 for %B). 

A bullish signal triggers when RSI becomes oversold and then breaks above 50, while a bullish signal triggers when %B becomes oversold and then breaks above 0. The green arrows show breakouts in late April and mid August. %B became oversold last week and has yet to break above 0. Thus, it is still in oversold condition. RSI did not become oversold. I would like to see both become oversold and then look for the momentum breakouts.

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Highlights from Chart Trader (Weekly Reports/Videos):

November 1st Report: Stocks pulled back the last two weeks and we showed five breadth indicators to identify oversold conditions. We are also monitoring the September breakouts and key support levels for QQQ, MAGS, XLK and five other tech-related ETFs. Plus a bearish pattern in SMH. With recent pullbacks, we are seeing oversold conditions in two ETFs and bullish setups in two Healthcare stocks.

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