Tuesday, July 7, 2015

China Shanghai Comp 50% Retrace

Yes thats right, at the lows of today, the comp has retraced 50% of the last years move up. That is a common rule of thumb measured target for a correction, and certainly a Fibonacci number.
Beware shorts. Under that 3200 as the .618 retrace and 3050 4th wave of lesser degree offer support.

click to enlarge

Unfortunately for the Chinese (and the rest of us), that is merely a short/medium term picture.
Longer Term the risk of continued downside is high.
 15 Year Chart / Qtr. Bar
click to enlarge
The "B" wave on this 15 year chart is a classic abc zig zag structure in Elliott Wave theory, retracing a Fibonacci  .78 of the A leg down. 
The "C" wave down measured targets are;
C=A at 718 
C=.78 of A at 1700
C=.618 of A at 2422
Entire History of Comp
click to enlarge
Note the lows on this very long term chart are overlapping the preceding highs, suggesting an abc structure history.



Why do we care? China craps out crude craps out.



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