Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Dow Short-term Stock Market Trend Analysis - 6th Mar 21
Intel Rocket Lake EXPLODE on Launch - 11th Gen CPU's RUN VERY HOT Bad Cinebench R20 Scores - 6th Mar 21
US & UK Head for Post Coronavirus Pandemic Lockdown Inflationary Economic BOOM - 6th Mar 21
FED Balance Sheet Current State - 5th Mar 21
The Global Vaccine Race Against Time and Variants - 5th Mar 21
US Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In Stock Market - 5th Mar 21
After Gold’s Slide, What Happens to Miners? - 5th Mar 21
Racism Pandemic Why UK Black and Asians NOT Getting Vaccinated - NHS Covid-19 BAME - 5th Mar 21
Get Ready for Inflation Mega-trend to Surge 2021 - 4th Mar 21
Stocks, Gold – Rebound or Dead Cat Bounce? - 4th Mar 21
The Top Technologies That Are Transforming the Casino Industry - 4th Mar 21
How to Get RICH Crypto Mining Bitcoin, Ethereum With NiceHash - 4th Mar 21
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Volatile to $1500 But Chinese Stock Market SSEC to Outperform!

Stock-Markets / Chinese Stock Market Oct 19, 2010 - 04:15 AM GMT

By: Lorimer_Wilson

Stock-Markets

Best Financial Markets Analysis ArticleDr. Nu Yu writes: There has been a great deal of excitement about the recent performances of gold and silver with most analysts extremely optimistic regarding their potential. That being said technical analysis shows that gold is in for some very choppy seas ahead compared to the surging seas of the Chinese stock market. Perhaps today the refrain "Got Gold?" should be replaced with the words, "Buy Chinese Stocks!"


Gold in a Bull Market With a Bearish Basis for the Intermediate-Term
At this point with the gold price sitting at an all-time high it has developed two major patterns that should draw our attention.

1.  Ascending Broadening Wedge
The first pattern is a 7-year Ascending Broadening Wedge or megaphone formation confined by line A and line B. This pattern is similar to a rising wedge but with a broadening price pattern and it tends to appear in a bull market with a bearish bias. The most important feature of this pattern is that the swing amplitude between two boundaries becomes larger and larger, and price movement gets more and more volatile. This feature indicates that price sooner or later will have a downward swing to re-touch or re-test the lower boundary (line B), although the big upward swing generates a great attraction like fireworks.
 
Gold currently has a very broadening range between 900 and 1400. Once a downward swing happens, a drawdown could be very significant, with no mention of any potential downside breakout.
 
2. Rising Wedge
The second pattern is a 2-year Rising Wedge formation confined by line A and line C. This pattern also typically has a bearish bias but it can be realized only when a downside breakout happens at the lower boundary of the wedge. It looks like that two boundary lines of the current rising wedge on gold will merge at near the price of $1,500. It indicates there is a big potential for the price of gold to test the lower boundary line C of the rising wedge in the next three to six months before reaching $1,500.
 
A combination of an ascending broadening wedge and a rising wedge is a typical characteristic of a state of increased disequilibrium driven by overconfident market participants and is a sign of setting up a potential powerful volatility storm in the near future.
  
Shanghai Stock Exchange Composite Index Expected to Have a Fierce Advance Soon
Since the bearish Death Cross in the early part of this year (see chart below) the Shanghai Stock Exchange Composite Index (SSECI) has been depressed and has been in a downward channel for the last 14 months. However, a new uptrend should start after the bullish Golden Cross, which is defined by a successful breaking through both the 17-week moving average and the median line of the 14-month downtrend channel. Please note that my definition of the Golden Cross is different from the traditional Golden Cross of the 50-day and 200-day moving averages. 
 
Indeed, with the Golden Cross being confirmed on October 8th, the SSECI has surged 10% and is fast approaching the target level of 3,000 at the upper boundary of the 14-month downtrend channel which probably will not be able to resist a fierce advance.

 
Three Peaks and the Domed House
A special chart pattern, “Three Peaks and the Domed House“, is emerging from China’s SSECI. With my modified version of George Lindsay’s basic model (see below), the “Three Peaks and the Domed House” pattern can be divided into five major phases:
1) Three Peaks phase,
2) Basement phase,
3) First Floor phase,
4) Roof phase, and
5) Plunge phase.


This modified version, using “phase-counting”, is a macro approach to Lindsay’s basic model, and it is different from the classical micro approach using “number-counting” from 1 to 28. In the chart the SSECI is plotted as a red line against Lindsay’s idealized model in a black line.
 
From June of 2009 to April of 2010, the Shanghai index developed the “Three Peaks” phase. Then it had a sharp separating decline to reach the July 2010 low at 2320 and formed the “Basement” phase during this summer. Now it just started a rapid advance in order to build the “First Floor” of the Domed House.
 
Calibrated against Lindsay’s model:
a) the SSECI should reach the “First Floor” phase near 3300 with a 10% upward move from the present price by the end of this year
b) the target “Roof” phase of the Domed House is projected at 4200 for the SSECI by the middle of next year which represents an 81% upward measured move from the low of the “Basement” to the high of the “Roof”.
 
(Last week Market Vectors China ETF (PEK) was launched by Van Eck Global with the claim that it is the first and only U.S. listed ETF designed to give investors exposure to China’s A-Shares market. It would appear to be a very timely introduction!) 

Conclusion
There you have it! The ascent of the price of gold to $1,500 is going to be VERY volatile over the next few months while the Chinese stock market is about to take off in a major way. The choice is yours.

Dr. Nu Yu (fx5186.wordpress.com/), co-founder and president of Numarkan Investments and an affiliate of the Market Technician Association, is a frequent contributor to www.munKNEE.com

Visit http://www.FinancialArticleSummariesToday.com, “A site/sight for sore eyes and inquisitive minds”,  and www.munKNEE.com, “It’s all about MONEY”,  where you can sign up for their FREE weekly "Top 100 Stock Market, Asset Ratio & Economic Indicators in Review."  

© 2010 Copyright  Dr. Nu Yu - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules