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Trading Any Market

China Extends its Stocks Bear Market

Stock-Markets / Stock Markets 2018 Sep 11, 2018 - 03:43 PM GMT

By: Anthony_Cherniawski

Stock-Markets

Starting off with the Shanghai Index, which probed beneath the August low this morning. This confirms that Wave (3) may not be complete. Three other indicators of that analysis are, First, Head & Shoulders, when the neckline rests at the bottom of a Wave (1), indicate the minimum target for Wave (3). Next, the Cycles Model does not indicate a Master Cycle low until late October. Finally, a Wave (3) should terminate well beneath the daily Cycle Bottom. There’s still work to do!


Bloomberg reports, “China’s sinking stocks are on the verge of an unwelcome milestone.

The Shanghai Composite Index closed 0.2 percent lower on Tuesday to within 10 points of where it bottomed out in 2016, having briefly breached that level in the afternoon before paring the decline. If the measure drops further, it’ll be trading at the lowest since November 2014, before the nation’s stock boom and subsequent $5 trillion bust.

SPX futures have declined beneath the mid-Cycle support at 2873.75 this morning, making a low thus far at 2870.00.

ZeroHedge reports, “Just when it seemed that the tenuous trade ceasefire between the US and China could result in more stable market sentiment, European stocks dropped -0.5% to session lows led by mining and autos, with S&P futures sliding as volume surged, joining Asia in the red after Reuters reported that China would ask the World Trade Organization for permission to impose trade sanctions on the U.S. rekindling fears over trade relations among the world’s two biggest economies.”

VIX futures are higher this morning. They are still beneath mid-Cycle resistance, but may stage a breakout as early as today. The reason is a very strong surge is anticipated in the cycles Model with an inverted Master Cycle high due next week.

TNX may be challenging its 30.16 high as Wave [c] becomes more complete. Today is day 252 in the current Master Cycle which leaves another week to complete it. The probability is that it may end up testing the prior high at 30.16, at a minimum. Should it break out, there will be mass “piling on” among the traders who are still building up their short UST positions. The aftermath of Wave C may be devastating.

Should the Master Cycle peak come early, the bounce may fade before challenging the August 1 high.

USD futures appear to be consolidating beneath yesterday’s high. The immediate direction is not certain yet, as the Cycles Model shows strength over the next week. It may be that the upper Diagonal trendline at 96.00 may be tested in that time. However, should USD lose its support, the decline may be a two week-long panic.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals.

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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