This is the chart that tracks companies on the Shanghai index. This is the S&P created index and for now, is the best I can track the Shanghai index with. I’m convinced that any fundamental news that comes from China is controlled by China’s highly efficient propaganda machine.
The fundamentals in China are far worse than anything you may have been reading. It’s not rocket science but the Chinese economy is slowing much faster than we think. China is a nation of zombie, companies, banks, and cities. I could go on and on but the short version is that China is all built on debt, and so far has broken all records making the 2008 crisis seem like a walk in the park.
The peak in 2008 matches a major peak in most of the commodities, which I think is wave 3 in Cycle degree. The bear market has been going on for about 10-11 years and I see it far from being finished before any huge bullish phase comes down the pipeline.
Right now the two trend lines put the Shanghai index in no man’s land and that the present rally is just another bear market rally. There is a very convincing inverted zigzag I see and they usually get completely retraced. Mind you that could still take a few years to play out especially since solar cycle #24 is still running.
I don’t have a big Gold/Shanghai ratio database accumulated, but enough to give us some extreme readings. A low ratio means that the Shanghai index is cheap when compared to gold.
Today this ratio sits at 2.37:1, which is down from an extreme of 6.61:1. In 1996 this ratio was 1.29:1 and the Shanghai may even come back to this cheap ratio.
The majority of the world may be fooled by the propaganda of the China miracle rise, but I’m not! Everything regarding China is built on debt as their money printing skills make the USA look like rank amateurs. What brought the 2007-2009 markets down with toxic investments is now being used in China on a scale not even imaginable! I have a very large following from China but the news is censored and false news is rampant. A chart is about the only truth we can see regarding investing in China.
Since the 2007 peak, the Shanghai index tried the second time to break out but failed miserably so far. I see the secondary top as an ending to an inverted zigzag which started back in late 2008. This “A” wave bottom in Intermediate degree would be the point of origin. Returning back to the point of origin would prove this 10-year-old bull/bear market is just a fake like all the other news coming from China.
China Uncensored is an attempt to give us alternate news and I have watched about 20 episodes in the last few weeks. Search out the “Bike Sharing Video” and you will see how markets really work under communist economic logic!
I have no Gold/Shanghai ratio database setup but at present, we are sitting at about 2.10:1 which means it takes about 2.10 gold ounces to buy one unit of the Shanghai stock index.
If we are lucky the Shanghai could also see an “A” wave bottom when the DJIA does the same thing this year or early next year.
If there is one country that can bring down the entire world financial system and that is China. I think big tech companies trying to get a foothold in China have compromised their own security and all their customer’s security as well. Apple is no exception! In a tech bear market, all the horror stories will come out as bearish news becomes a top seller!
The Shanghai index topped in late 2007, after which it crashed in a dramatic fashion. This also matches the crude oil peak very well, with that secondary peak never reaching new highs since. I see the crash and counter-rally containing an inverted zigzag. The long trend line from the 1996 bottom did not hold back the bearish mood that is starting to hit stock markets around the world.
Any bear market rally always retraces itself, back to the point of origin, which would be the (A) wave in Intermediate degree. Of course, it can go much lower as well. We also have one crazy wedge that can give us a clue that the Shanghai index is going down. I show a 1-2 wave count in Minor degree, but that can also be the 4th wave already, due to its length in time it took to counter rally.
We will know more as we get further along in the year, as once a trend resumes it will not stop until it is in an oversold position again. A zigzag decline leading into a Primary degree “A” would definitely give us another bullish phase as another bear market rally, which can be an inverted flat. I have no COT, or MV report available to use, but all the North American markets do. When the commercial hedgers all turn net long, then the Shanghai will also rally.
Mark Hulbert posted a great article that will give a few people something to think about.
The DAX has also turned down along with every other major index from around the world. From the early 2009 bottom, the DAX charged along just like all other indices, but with far more choppy wave structures than others. Grading the quality of waves tells me we are much closer to diagonal wave structures than pure impulse wave structures. Early 2018 was the real top for the DAX, which has never been breached and is holding at 13,500.
The stock mania around the world has ended, as the world dips into a demographic nightmare that investors have little knowledge about. As the DAX crashes along with the rest of the world, I’m sure the mainstream media will have to find reasons why the market is imploding, and the story above is just one. More and more of this demographic risk will start to show up as the media will run out of all other excuses why stocks are crashing.
In the long run, until 2022, we should be in a bear market that is just starting to get going. As long as analysts are saying to “buy on the dips” then these analysts have no clue to the size of this impending bear market!
There are 30-year cycles at work here and this 2018 peak is 89 years after the 1929 stock market peak. We would be off by 1 year in 90, which is just 3, 30-year cycles. I have done thousands of these 30-year cycle calculations between 100’s of different peaks, and yet a one-year error rate seems to stay true.
This is not going to be a simple crash like 1987 was, as this time there should be a huge long bearish move like the 1930-1932 decline gave us. 1987 was a Minor degree crash, and what we are dealing with here is at least 3 degrees higher.
Deflation is the real threat and the first clue that the Fed is going to switch is if they start to use “pause”, in their language!
Where the first major support price level comes is not an exact science but I look for major previous bottoms to give us a clue. Any big previous low can supply support, but support for what?
The Nikkei is a prime example what a real bear market can look like when demographic shifts are involved. This bear market always gave me trouble, so I had multiple alternatives to try, or should I say, “forced to try”! This time I looked at the wave positions as one giant triangle, with the potential of coming up to the “D” wave in Primary degree. The mood between a “B”, “D”, Diagonal 1, or an Impulsive wave 1 in a bull market, are next to impossiable to tell apart.
Any asset class on this planet that goes up has a bullish mood to it. The best way to tell them apart is by the pattern it is making in gettting there.
There is a high probability, an “E” wave in Primary degree is coming, which would push the Nikkei to new record lows. This low would also be building a huge bottom base ending in 2022, along with all other world markets. Even if the 2009 bottom is the Cycle degree wave 4 bottom, we would still need a hefty correction between a 60% and 80% net retracement. Every stock index will join the bearish party, as the Nikkei will not stand up to the bears. 2008-2009 is a prime example of how many asset classes crashed together, so I expect it can happen again.
It looks like we had our peak just a bit over a month ago, and now the Nifty has shown us in what direction it really wants to go. It looks like an expanded pattern may also have been completed. Many times the resulting “C” wave can be very steep and the Nifty sure fits that description.
No country is going to avoid or be able to hide from the impending deflationary crash that is coming. What happened in 2008, was just a Primary degree crash and recession but this time it’s bigger by “one” degree. We are heading to a Cycle degree wave 4 bottom that will not be over in just a month or two, but it could take until 2022 before the end of a bear market is near. There is no chance that I can keep up with giving detailed Nifty declines and wave counts, as the Minor degree is 3 degrees below Cycle degree.
All those experts that are telling you to buy on the “Dips” have no clue how big this bear market will get or how long it will take. After 2022 it could take a 19-year bull market before the Nifty hits new record highs, based on the 30-year cycle. The 30-year Cycle ended in 2011, but some dates will be out by a 1 year or so, especially when expanded patterns are involved.
I do have a strong following from India but I will not show every little move that might be good for simple day trading set-ups. I don’t think the Nifty can come out of the impending crash and bear market unscathed. If a new record high gets established again, it would surprise me a bit, but sooner or later all markets will start to tank. We need more downside, before we no longer have the time for a new record high in 2018 to establish itself. We already have a small set of 5 waves forming, but we have to wait to see if other sets of 5 waves start to form.
I have no real track record of the Gold/Nifty ratio, as I would have todo some back checking to create some paramerters I can work with. Today this ratio stands at 9.83:1, which means it takes 9.83 ounces of gold to buy one unit of the Nifty. This is already to the expensive side, but in the next few years we want to buy more units of the Nifty with one ounce of gold.
The Nifty has also potentailly peaked at a Cycle degree wave 3 high, so a big long drawn-out bear market will happen. This bear market bottom may take until late 2022 to complete, which is 90 years from 1932. 90 years equals 3, 30 year cycles. Solar Cycle #24 has to end, and solar cycle #25 will start and that is when I will turn very bullish.
This is what they call a one day chart with nothing but diagonal wave structures which are not important enough to spend all my time counting them out. What I’m after is the last peak of this run as India will not be unscathed in the comming deflationary crash. So far the Nifty has already turned and August may see the continuation of a bearish trend. Every new record high could be the last record high, and the record high for all of 2008. India produces many commodaties that are traded all over the world, so when commodaties implode so will the Nifty.
The record high to beat again, is 11,366 which peaked today. I have a strong following from India as I talk to traders about the Nifty in my neighborhood. Hopefully this peak will hold but otherwise, I have to keep it in mind that any extreme can still push to a higher extreme, before they implode! Without a doubt the world is going to suffer a major deflationary crash, where nothing including gold will hold up, except for the US dollar. My personal trading account is already mostly in US dollars and they will remain there for the rest of my life, as I prefer to trade in US funds anyway. When I convert back to CAD at any time, I get an extra 33% kicker to boot.
Gold and silver was in a 30 year mania bubble in 2011, and its crash and bear market is just starting to get going. India is also a huge gold market, so to say that bullion holders in India are not going to get hurt is an understatement. Even cotton prices are set to implode as all commodaties will take a hit.
This is the 4th world index that I looked at recently. It looks like the DAX investors have had a wild ride in the past and now it’s coming back! The DAX history is linked to the US markets as the DAX crashed and burn right along with US stock exchanges. Back at the 2000 bubble, I thought there could be an expanded flat, but it also works as a great diagonal 5th wave in Minor degree. After 2000 the bottom fell out of the DAX but this DAX crash counts out very well as a zigzag.
The zigzag bottomed in early 2003, after which the DAX took off in yet another bull market. The DAX also counts out well as a set of 5 waves in Minor degree. “In a bull market “every” 5th wave top must be joined or connected to a one higher degree number. So in mid 2007 the 5th wave in Intermediate degree topped, but also stopped on a wave 3 in Primary degree. After which it crashed again.
Then by early 2009 the DAX bottomed right along with the rest of the world, but also participated in the 2009-2018 bull market. The 5th wave in Primary degree counts out very well as higher quality 5 waves, which keeps it out of the diagonal wave classification. I could only squeeze the 5th wave in Primary degree into the chart, which should be capped. The 2018 peak, is a wave 3 in Cycle degree, not SC degree and especially not GSC degree. Being out by just one degree, we can be out by a mile, so we want to take care about what we stick onto the 2018 peaks.
All my DAX peaks are ending with a wave 3 count and so are all my other indices that I work with.
A friendly warning, “Don’t trust any wave count ending with a 5” from anywhere on the Internet. They have broken the Elliott Wave sequence, if they don’t cap any bull market 5th wave.
To confirm any future Cycle degree 4th wave correction, it will take a very attentive wave analyst to keep tracking the DAX which I don’t have but I will track some of the bigger turns when I can. It’s the crowd psychology that is being damaged as they don’t know what to do with all this volatility. One expert claims that this is the most volatility he has seen in the markets in his entire career. What? Stay tuned as youv’e seen nothing yet!
Starting back in 2001-2002 I had an Intermediate degree 4th bottom, which matches the bottom with most US indices. The pattern is also made up with diagonal wave structures, especially from the 2009 crash bottom. That’s one ugly run from the 2009 bottom, and it is a pattern only a mother could love!
From 2009 to 2018 looks like it is right out of our EWP books as the entire 5th wave is a diagonal. I counted the diagonal with a simple wave count, but technically they are all connected zigzags. Any wave 2 or wave 4 can contain a flat type pattern, but in most part waves 1-3 and 5 should be zigzags. Expanded “B” waves could make this pattern but then we need a very strong down crash to confirm that.
I don’t think that is the case as any “B” wave rally should be far more volatile than what we can see. Is this Nifty index also at a wave 3 in Cycle degree? I sure think so, but it will take an attentive wave analyst to confirm any bear market that we are going to get.
One lesser degree from a Cycle degree top is the 4th wave in Primary degree, not Intermediate degree. This wouldn’t even kick in until the Nify hits about 6000, but most of the time corrections will travel to the lower end of the scale, which is at the 3000-2500 price range. Sometimes even a bit lower. A 73% crash may do it, and a Cycle degree bottom will correspond very well with all other markets I track.
Looking at another wedge sure will kick the enthusiasm out of the bulls, so all I can say is “Watch Out Below”.
I have a large following from China and I wish I had more time to post the Shanghai more frequently. From the 2007 peak, the Shanghai crashed right along with all the US markets, but after that the Shanghai started to do its own thing. We have a major secondary peak that is a lower peak, which puts the Shanghai into a bear market. Big bear markets are just big bull market corrections from my Elliott Wave perspective.
The 1000 price range could put a bottom to the Shanghai as that would be the previous 4th wave of one lesser degree. From everything I looked at most of the solar cycle turnings has been from the tops of solar cycles not from the bottoms as most US markets have been doing. Now the Shanghai seems to be drawn to the bottom of solar cycle #24, just like US indices have been doing.
It still may take 3 years for the Shanghai to bottom, but it can turn into a bull market right along with US markets just the same. Despite Trump’s efforts in a trade war we will still be in a world economy, relying on each others products. China is a big buyer of LNG products and imports more oil from Asia than the US does. China now gets more oil from the Middle East than the US does – Vox
It took the Nikkei index along time before it topped but in the last few months a spike has appeared after which the Nikkei has started to decline. The Nikkei has turned very close to the US indices turning dates. Which could be ending on a Primary degree “D” wave bull market. This also means that the Nikkei could suffer a 3 wave decline resembling another zigzag, but it will be one degree lower. My bottom big trend line is parallel to the top trend line, with the bottom trend line pointing to new all time record lows for the Nikkei stock exchange.
In a nutshell, the Nikkei could end on the same Cycle degree 4th wave right along with all the other 5 indices I cover. I did not keep a record of the Gold/Nikkei ratio, but presently we are sitting at a 16.6:1 ratio. It takes 16.6 Troy gold ounces to buy one unit of the Nikkei. This makes it about as expensive as any of the US indices. I would have to do some back checking to find the cheapest ratios, which I will have to put on my list. For now we have one ratio and I’m sure it is also hitting a brick ratio wall.
Checking the COT report with the Nikkei I see the commercials are net short by a ratio of 1.7:1, which isn’t all that bad, but the speculators are net long by a ratio of 4:1. The speculators are far more bullish than the commercials are bearish, which puts the speculators into a typical bull trap. A “D” wave bull trap.
The single rising trend line I have may give the Nikkei a pause, for a potentially strong counter rally.