Due to surging interest rate and tight liquidity, Shanghai SSEC dropped 5.3% yesterday and today, at its intraday's low, the index dropped another 5.6%. However buyers in the afternoon managed to push the index back to near its opening price.
SSEC has remained in its consolidation phase since its record closing in 2007.
From its October 2007's peak of 6092, it plunged 72% within 12 months to 1708 - Wave A
It rebounded to 3462 for a 102% gain within 9 months - Wave B
Since November 2009, the index has been moving lower and lower for 42 months - Wave C
The index has reached the final journey of sub-wave 5 of the wave C. It may form a double bottom at 1700 level, that is another 13% to go.
It is rather funny that people are worried about the Chinese stocks only at this moment, after its has dropped 43% since November 2009 (42 months) and has reached the final part of its journey south. May be they are worried about a grand finale.
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