• 654 days Will The ECB Continue To Hike Rates?
  • 655 days Forbes: Aramco Remains Largest Company In The Middle East
  • 656 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,056 days Could Crypto Overtake Traditional Investment?
  • 1,061 days Americans Still Quitting Jobs At Record Pace
  • 1,063 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,066 days Is The Dollar Too Strong?
  • 1,066 days Big Tech Disappoints Investors on Earnings Calls
  • 1,067 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,069 days China Is Quietly Trying To Distance Itself From Russia
  • 1,069 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,073 days Crypto Investors Won Big In 2021
  • 1,073 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,074 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,076 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,077 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,080 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,081 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,081 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,083 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

David Banister

David Banister

Dave Banister is the Chief Investment Strategist and commentator for ActiveTradingPartners.com. David has written numerous market forecast articles on various sites (SafeHaven.Com, 321Gold.com, Gold-Eagle.com, TheStreet.Com…

Contact Author

  1. Home
  2. Markets
  3. Other

SSEC Completing a Correction?

The recent Shanghai Surprise has been breaking that potential bullish triangle I outlined several weeks ago with a downside break of 2900. Subscribers to TheMarketTrendForecast.Com may recall that was my line in the sand for the SSEC index to remain bullish. With the break of that possible bull triangle, the SSEC index has fallen down to near 2500. Everyone on CNBC is bearish on the Chinese Indexes now, and I can't find any bulls for that country either. They were everywhere several months ago, and now, nowhere to be found.

What I'm seeing as a possible intermediate "BULLISH VIEW" is that the Shanghai Index is completing what is known as a "3-3-5" wave pattern. This means it's an A B C zig zag to the downside, which works off the prior bull move from 1600-3400. So far this correction has re-traced a bit over 50% of that bull move, which would be typical and would kick everyone off the bull.

A 3-3-5 correction unfolds in a series of wave patterns. 3 waves down, 3 waves up, and then 5 waves down to complete. I outline this potential pattern below in the SSEC chart. This does not mean I will be right, merely that this is a very valid and normal corrective pattern after a massive bull wave up. The index is extremely oversold as well on traditional indicators, which I use to overlap my Elliott Wave views.

This forecast could mean some Chinese stocks are super cheap here, and it will be fun to watch the action from here. The index could drop to about the 2300 range and still validate this bottoming pattern. That means there could still be another 8% or so drop from here, but aggressive investors would start scaling into long positions over a few weeks. Indeed it was January of 2009 when I started recommending small cap indexes and mutual funds, but that index didn't bottom until early March of course. Scaling in was wise though, as the TNA 3x ETF soared from 11 to 60 during the bull phase up. I started buying at 28 and down to 11, so my average was around 20 or so.

Worth watching anyways...

Shanghai Composite Index

 

Back to homepage

Leave a comment

Leave a comment