Shanghai Composite Index; Has It Bottomed

Editor: Vladimir Bajic | Tactical Investor

What’s The Outlook For the Shanghai Composite Index

Before we get to the main article we would like to present you with a small video and a brief excerpt of  an article that we think makes for a compelling read:

” The one year chart illustrates that all is well on the surface and that the process of flooding the markets with hot money, in general, is working rather well.  The index could drop all the way down to 7200, and the short-term outlook would remain bullish.  We are fully aware that this economic recovery is illusory, but complaining and whining about this does not provide one with any extra insights into the markets. We need to focus on what is really going on and how the masses interpret that data. 

The truth is irrelevant if only you are aware of it; if the masses think otherwise, what appears as the truth to you could, in fact, be viewed as a lie by the crowd.  The truth can set you free, but in most cases, it can be detrimental to your health and wealth; at least as far as the markets are concerned.  ”  BBC Global 30 Index Signals Dow Industrial Index will trend higher

Shanghai Composite Index Via FXI


We are fast approaching an inflexion point, which is similar to the one that started in may of 2016 and lasted until Jan of 2018, taking FXI from a low of 28 to a high of roughly 54; a gain of roughly 93%. A bullish crossover would most likely push the following stocks significantly higher, TCEHY, JD, BABA, VIPS, NTES, etc. We have several of the mentioned stocks on our radar and will issue entry points on some of them when the MACD bands tighten up or they experience a bullish crossover.  Market Update Feb 18, 2019

Aug 2019 Update

FXI iShares China Large-Cap ETF daily Stock Chart

As can be seen in the above image, FIX has put in a lower high and that generally does not bode well for a market. If it closes below 39 on a monthly basis, then the odds are above 75% that it will put in a series of new 52 week lows.

Let’s look at the Actual Shanghai SE Composite Index

Shanghai Composite Index;; no sign of a bottom in 2019

The index has put in a lower high as indicated in the picture and the momentum could change at any point as it appears poised to test its lows again. If 2920 is taken out on a monthly basis, It should lead to a series of new lows before a bottomed is in place. At this point in time, we would avoid committing large funds to china, but one can invest in individual stocks or ETF’s that are defying the trend. For example (at least for now), NTES and TCHEY appear to be holding up well, while BABA is taking a beating.

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