Shanghai market had a very strong bull run from 2005 to 2007. The SSEC index started from a low of 1012 in 2005 shot to 6092 within two years for a 500% gain before it was dragged down by the financial crisis started in the US. It plunged 72% to 1705 by November 2008 and started its rebound 4 months ahead of Dow. However it completed its rebound within 12 months by August 2009 whereas Dow continued to move higher in the next 19 months until February 2011.
Within this 19-month period, SSEC has been moving side way to lower forming an expanding diagonal A-B-C-D-E pattern as shown. So far it has completed its wave A,B,C,D and sub-wave 1 and 2 of E. The next wave down will be the sub-wave 3 of E, which can either fall short or over shoot. This last drop is expected to be at least 30% down.
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