I continue to pick up The 32nd Jewel by Connie Brown. I dust it off and continue down the rabbit hole. What has been happening of late is I’ll get about 10 pages (no kidding) into a section and then something pops up in the writing and … down the rabbit hole I go, again. Most recently it has been helping, a lot, to follow Mr. Robert Edward Grant. He might not know it – OK, high probability he doesn’t – but his information has (amazingly ;)) been perfect for when I get “stuck” in The 32nd Jewel.
Today, I was going BACK to the subject of “Lattice Diagrams” and came across the “leading and lagging” market chapter. It’s a wonderful chapter to dust off the basics and look at something that you haven’t researched or analyzed in a while.
What drew my attention was the discussion about China and the Shanghai Composite. In a nutshell, China is a “leader” w/in the global financial trends. It’s not hard to imagine that Australia, India and South Africa all depend on China.
Additionally, if you have been following this blog for a while, you can see/understand the Canadian and Australia correlation. Then, it’s known (not going to say widely) that the TSX (Canada) leads the S&P.
So what is China doing?
Well, on page 36 of The 32nd Jewel she gives a count that shows the Shanghai in a bearish “C” wave which portends to lower Shanghai which means the dominoes fall to the bears …folks, trust me here, you want Ms. Brown counting waves … she is, without a doubt one of the best in the world. So, took her count and I’ve added the 2. I’m staying away from a large multi year triangle thesis, for now. However, if we do break ABOVE 3750 BEFORE breaking below the trendline and the .786 it’s game on for the bulls.
For now, this is the count that appears to be the highest probability.
KEEP AN EYE ON THE SHANGHAI .. then, of course, the All Ordinaries (Australia), the Canadian TSX, the German DAX and the S&P500.