Shanghai Correction Achieves Initial Target

By: Bob Hoye | Thu, Jul 2, 2015
Print Email

Chartworks, by Ross Clark

The Shanghai market has suffered a very poor week achieving the upper range of our targeted support. It has retraced 50% of the rally from the February low and kissed the 50-week exponential moving average. It is also within 200 points of a 50% correction (3960) of the rally from last year's low. This type of action following the parabolic run mimics the NASDAQ as of April 2000 and gold as of May 2006. We'll monitor this, one step at a time, not knowing if this was the ultimate top or where it will build a base for a new run. For now, we anticipate a wide range consolidation between 3900 and 4800 over the coming weeks. The optimum strategy during such a period would be the sale of puts or put spreads to earn time value now that option premiums have expanded.

Shanghai Correction Achieves Initial Target
Larger Image



Bob Hoye

Author: Bob Hoye

Bob Hoye
Institutional Advisors

Bob Hoye

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.

Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

Copyright © 2003-2017 Bob Hoye

All Images, XHTML Renderings, and Source Code Copyright ©