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The Shanghai Composite… or something

The SSEC is a bit of a challenge for me to tackle, as I have no access to detailed intra-day data.  Without a look at a 30-minute chart at least (preferably a 5 minute chart), I am unable to differentiate between the short-term structures, and am left with some blind guessing.

The long-term structure appears reasonably clear.  It would seem that 2008 was an A-wave crash, and 2009-2011 have been a B-wave triangle.  The triangle counts reasonably well, and demonstrates the correct 3-3-3-3-3 structure.  Without intraday data, where I run into difficulty is the short-term picture.

Let’s start with the long-term view.  I have superimposed the SPX in line-form behind the SSEC, to show that they sometimes trade in concert, and sometimes trade opposed.  Note the SSEC actually led in 2008, but has lagged since.  In fact, one could say the SSEC’s “bull market” only lasted a few months (can anyone say “no QE2 in China”?); it has not made a new high since summer of 2010:

Regarding the short-term picture, I cannot overstate the importance of having intra-day data.  Okay, that’s not completely true — I could easily overstate the importance of this.  For example, I could say, “A lack of intra-day data is the leading cause of slow and painful death in North America.”  That would be a definite overstatement.  But, as far as the counts go anyway, it’s pretty important data.

So I have fumbled around with the charts as they are, and have two to present.  The first shows the current move down as part of a nested 1-2 series.  Both first waves are complete, however, I have literally no clue on whether the current wave ii is complete, nearly complete, or something else entirely.  That’s where I really need intra-day data.  Also, I can’t reconcile the rest of the count without it.  Also, it’s the leading cause of slow and painful death in North America, as shown in this chart:

The second short-term chart is an ugly way to count the entire leg down as one wave.  I don’t like this count as much, because it doesn’t really balance very well.  In fact, when I look at the count this way, I am again inclined to think it counts better as an A-B-C. 

The problem is, if the larger count is correct — and there’s no reason to think it’s not, it’s a pretty good triangle — then the current wave down should be part of red wave C.  And C-waves are never A-B-C’s; they are always 5 wave moves.

But almost anything is possible, since I have no intra-day data.  Anyway, here’s the other ST chart.  As we can see on this chart, I forgot to save the chart I was working on, so I have to go re-do the whole thing.  I realized this after systematically uploading four charts to this article, which were all wrong (not shown). 

(30 minutes later…)

Luckily for you, I’m only going to show the correct one I just recreated (below) and spare you the agony of my personal hell:

I have seen some people try to count the whole wave as a leading diagonal. This doesn’t really work, since leading diagonals, unlike ending diagonals, usually break up into 5-3-5-3-5 moves. Allegedly, they can also break up into 5-3-5, although the reference materials offer no further detail than that (in this regard, the literature is a bit like a cookbook which says, “You need to bake this for 5 hours. Or 3 hours, whatever.” with no additional instruction). I suppose you could count this as a 5-3-5 fairly well, with an ending diagonal inside the leading diagonal, and a partridge in a pear tree.

So that’s what I’ve got.  Again, without ST data, it’s a bit like throwing darts at an effigy of a politician while blind-folded… without the tell-tale “OW!” you’d get from the real thing, there’s just no way to know for sure if you’ve hit it or not.

The original article, and many more, can be found at http://PretzelCharts.blogspot.com

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