In the last two weeks, Shanghai SSE composite index was having its roller coaster ride. Up and down with more than 3 to 5% a day with limit down for many stocks.
By last Wednesday close to 50% of the listed companies were allowed to suspend their stocks from trading.
In addition, the Chinese Government announced that company bosses, senior management of the companies and investors with more than 5% stocks are prohibited from selling their shares in the open market for the next 6 months.
This is a heavily manipulated market. Within 12 months SSE Composite can go up 160% from 2000 to 5178 followed by a 35% decline within a month.
This is nothing if we look at the up and down in 2007/2008. That was 460% within 2 years from August 2005 to October 2007 averaging 230% a year with a subsequent plunge of 70% within a year.
Has the Chinese market collapsed ? Technically if the last high of 5178 is the end of wave B, then the market has collapsed, it is heading for 1000 level, another 70% to go from its current level.
But personally I don't think so, I give it a higher probability that SSE Composite is forming its major wave 2 correction so as to tie in with my scenario of a major collapse in 2017 when the assets bubble finally burst.
Don't forget the possibility of a 100% retracement for a wave 2 correction.
Greece
Very likely a revised bailout package will be compromised and the 'No way to solve' Greece debts problem will be postponed to 2017 for a final countdown.
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