As the Shanghai Composite Index finishes its largest six-day advance since November 2008, Bloomberg just can’t get over how the Chinese markets continue to defy it.

Despite Bloomberg constantly telling us that the Chinese market is a bubble about to burst, Chinese stocks just keep setting records.

Well, let’s chalk one up for Asia Unhedged, who has been telling you the rally is strong and has legs for quite some time.

The Shanghai Composite added 2% to 4,910.90 at Monday’s close, for a 15% rally over the past six days, the most among major global benchmark indexes tracked by Bloomberg. The Shenzhen Composite rose another 3.6%. Over the period more than 250 stocks hit their 10% daily limit.

This year alone, the Shanghai Composite has gained 52%, while the Shenzhen has doubled and trades at 71 times reported earnings. Over the past year, the Shanghai Composite has surged 142%.

Of course, Bloomberg isn’t alone in being baffled by the Chinese markets. Stock analysts have been caught completely off guard as well. A year ago, analysts predicted Chinese equities would rally 28%. Instead they rocketed four times that, soaring 111% through last week.

We were especially impressed that both stories had the same video on the page, the one where the Bloomberg anchor is baffled by how this could happen.

Maybe he should read the news.

The biggest reasons for the rally have been the People’s Bank of China instituting three interest rate cuts since November and a lowering of lenders’ reserve ratios twice this year. And more government stimulus is expected. Interest rate cuts sent the U.S. stock markets soaring over the past six years, and now the European Union is instituting them to spark their economy and as a result their stock markets. So, why is the fact this is happening in China such a shock?

Other factors include 120 initial public offerings since April, already matching last year’s total, the November link between the Shanghai and Hong Kong exchanges in November, and a link between the Shenzhen and Hong Kong stock exchanges due to start this year. The most recent rally resulted from Friday’s announcement that Chinese mutual funds will begin cross-border sales starting July 1.

Currently, Chinese investors make up 80% of equity trading and stocks accounts with non-zero balances are rising at the fastest pace since 2008, according to data from the China Securities Depository and Clearing Corp.

With those kinds of numbers, it’s obvious the huge rally has been driven by domestic investors jumping into the market. However, the recent developments seek to open Chinese markets to foreign access. This means a flood of foreign money will soon start flowing into Chinese stocks.

“Most people expect the Hong Kong market to benefit from the mutual fund recognition and go up,” said Yen Chiu, a Hong Kong-based trader at Shenwan Hongyuan Group told Bloomberg. “There’s a great catch-up rally after A shares jumped yesterday.”

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