000002 trade ideas
China's situation: Bearish outlook and global turmoilIn the recent turn of events, the focus of everyone has been shifted to the terrible terrorist attacks that occurred in Paris where countless innocent people were killed, all of a sudden.
I don't want to raise fingers and point at anyone, but it draws my attention to the recent bearish scenarios presented in most stock indexes around the world, where a very grim outlook has formed.
Today I will focus on China, the oil futures and Sinopec's chart. I have given timely signals to short these instruments, see related ideas, and it's now clear that my forecast is valid and en route.
I'd like to condemn these events, and pray for the families of those who were sadly killed, and for a peaceful resolution to all this turmoil, which I fear might not end well.
In this more serious note, I'd leave you with my forecast for these instruments, I fear this is very much alike 2001, too much for my liking.
Regards,
Ivan Labrie.
CHINA is NOT OUT OF THE WOODS YET!!!DISCLAIMER!!! This is the first time I ever looked at the Shanghai Index
China is not showing any bearish signs yet but I can't feel bad for them. China has had a GREAT year in the market. Even with this pullback, if you invested in the Chinese market around this time last year, you would have still doubled your money. If you invested at the beginning of the year you would still be up over 10%. That is pretty darn good. The only REAL losers are people that invested after April Fool's Day (pun definitely intended).
That being said, its time to get real! The Shangai index had a major drop and is showing no signs of hope. Currently, the first sign of hope would be a close over 4223. Even this would only be a glimmer and I would be skeptical. I would say a close over 4687 to be the real turning point and that is a big RISK ratio right now. I will keep an eye on this and adjust these key levels as necessary.
The blue lines on the chart were support lines and the red line is currently the BEST resistance line. I got these lines from the weekly and monthly chart. Currently the blue lines are irrelevent but dropping below 4832 was a MAJOR indicator that something was wrong.
I am interested to hear what you may think.
AUDUSD like clockworkYesterday we said that unless the Shanghai Composite is showing another major down day, the Aussie won't break lower.
Wednesday, the Shanghai Composite 1% lower but this was certainly not enough to start a new bearish trend wave. The Shanghai Composite is still above its support level at 2983. As long as this holds, there is no reason to short the Aussie.
It's not often that such obvious connections exist. Make sure to use it to your advantage and don't sell prematurely. Wait for the confirmed breakdown in Shanghai to get on the train of a high probability trade. Currently, all premature short positions are in a squeeze which is totally unnecessary.
Shanghai composite Class A Index: Uptrend signal failedThe 7 week uptrend present in the index has failed. Now we expect price to drop back to 3339.463 in the coming 7 weeks or earlier. Minimum target would be 3542.160. If it were to drop below 3339.463, it might reach my 8 week downtrend signal's target below, but for now it's early to say.
Price sits right under the 52 week moving average and has clearly found resistance and lost momentum.
Good luck.
Kind regards,
Ivan Labrie.
Shanghai Class A Index - Daily Weekly Time@Mode DowntrendTime@Mode is a powerful, simple, building-block method to describe the trend in any time frame.
Refer to my many other Time@Mode charts here at TradingView.
Looking at the rally in XGY0 (Shanghai Class A Index), you can see in early 2015 that it built 8 weeks at the 3400 level and once it broke out of that range it moved up for 8 weeks. Once it rallied to nearly 4800 and corrected as time expired on the rally (8 weeks), it built a higher, more risky base of 4 weeks from which it advance to 5400 in 4 weeks from the 4-week base.
Time ran out for the rally and XYG0 collapsed under the base at 4400-4500 and returned to the 8-week base at 3400 where it found footing. Along the way, it had built a 6-week distribution zone from which a 6-week decline unfolded into the October time frame. A lower distribution zone was formed at 3200 for 6 weeks, but prices advanced from that level and advanced for 6 weeks where time expired once again at the 3800 level.
6 weeks built in an uptrend at the 3600 level (see purple '6') and prices then advanced and an 8 week accumulation set-up at 3700 (see purple "8") and it seemed set to fly as I drew in the yellow line and a forecast to 4000-4100-4200-4500. But what happened at the 3800 level is the interesting part. Each week it touched 3800 it added a week to the distribution level from before from 3800-4200 but 3800 became the most important and most powerful level that was controlling prices. As prices move away from 3800-3700, it sets up a 10-week decline that has wide downside projection.
The market usually will react at previous important "modes" like the "6-week" 3200 level. The circuit breakers assured we would stop there today, but for now I wanted you to see that XGY0 has been operating very nicely using Time@Mode methodology. You can apply this technique on any time frame in any liquid market.
Note: I don't want to put "SHORT" on this chart because that wouldn't be fair to a market that is locked limit down 7% tonight.
If you have any questions, reply below or come to our chat room - "KEY HIDDEN LEVELS".
Here's to a successful 2016.
Tim
12:47AM EST January 7, 2016
Shanghai Composite: An exercise in EW and time at mode analysisIt would seem as if the Shanghai Composite Class A index has topped for some time now, as it completed an explosive wave 3 advance, culminating in an ending diagonal triangle.
The correction that is unfolding is a very sharp zigzag, and it should reach the area of support below, where both monthly, quarterly and yearly range expansion bar support meet. This area happens to be my estimated fibonacci retracement 0.382 zone.
The quarterly time at mode analysis suggests the rally might continue after this intense but potentially termporary setback.
Regards,
Ivan.
Shanghai CompositeAfter check some technical analysis and comparing it with the VIX index I can conclude that Shanghai Index hasn't sink yet.
The VIX index is pretty low compared to 2008/2009 levels but it's starting to fly again.
About it's chart we can see two possible situations. Seems like Shanghai Composite is following 2 main channels.
I recommend to take a position after the breakout of any of this channels.
Also we could think the bullish channel is just a dead cat bounce, this could be true if it tries to fill the gap at 3240.
So I conclude Shanghai Composite could keep going down if breaks the bullish channel making other index correct.
Regards.
China Stock Market Poised for Another 25-30% DeclineShanghai "A" Shares index appears to be declining from the mid-2015 high in a zigzag 5-3-5 correction. The current wave B appears to be ending as a triangle which, whether complete or not, is shaping up within parameters that would yield a downward thrust measurement for wave C equivalent to between 28.4 to 32.4% from the present level. Coincidentally, the level of the 78.6% retracement of the rally from June 2013-June 2015 falls right in the middle of that range, near 2670.00 .
Should the index exceed 3848.00 before then, I will reconsider this count.
China Stock Market Setting Up for another 25-30% DeclineShanghai Class A Shares Index reflects that it may soon drop another 25-30% from present level, reflecting roughly 78.6% of the initial leg A down of the ABC correction that began in mid-2015. This is apparent from the triangular wave B, which, although not yet complete, is shaping up within parameters that imply such a downward post-triangle thrust measurement for wave C will be likely.
A double bottom in the daily a warning flashing in the weeklyThe Shanghai index is showing support at the 3870 level, with a double bottom in the Daily and support in the Weekly. However the red signs are flashing. Technically we can expect a rebound to 4224 and if strong enough to 4700.
Since we're still in negative territory and the close in the weekly is below the 34 EMA, this could act as resistance and after the rebound in the daily, this could still take another dive to the 3500 level in the following weeks.
Recount WAVE 5 (Bearish Market) - Compare WAVE 3 & 5's MACD, WAVE 5 lost momentum compares to WAVE 3, double top formation
- Both Wave 3 of WAVE 5 & Wave 3 of WAVE 3 has RSI extreme reading, support Wave 3 count makes sense
- RSI trendline broke and now RSI is below 50 on weekly chart, which is really bearish
- Comparing time circle of WAVE 3 & 5, it shows WAVE 5 is shorter than WAVE 5 on time period
- Forecast its target on WAVE 4's low which is 1935, according to EW guideline
