Last post: https://bartscharts.com/2023/06/05/the-shanghai-dominoes/
As discussed in the last post, focused on China as they are one of the leading markets …
Down 2+% today and down 3% for the week.
Sitting right on the long term LOG trendline … believe if we break that trendline, most all else should follow.
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.
well, the US struck Syria today.
Spratley’s are heating up and, well, they always have … made me think of China and Taiwan.
Would you check out the BUY PATTERN on the New Taiwan Dollar? Two MAJOR patterns on a monthly chart all coming in/around the same area.
PAY ATTENTION.
folks, knowing what’s going on in the currency market is so crucial .. not only does it completely dwarf any other market out there in volume/volatility but it also play such a crucial roll in the flow of funds, affects on commodities, etc.
back in 2015 I posted “the most important chart of 2015″ and it was the Chinese Yuan: https://bartscharts.com/2015/12/09/most-important-chart-to-end-2014-revisited-in-december-2015/
I was aware that $AAPL did a bunch of manufacturing over there and, in the past, had shown the correlation of the price of Palladium to $AAPL stock. You can check that out here – https://bartscharts.com//?s=palladium
it’s take a little bit of time – imagine that – but as the entire world was wondering ….”hmmm, I wonder if the Chinese are done letting the Yuan gain strength against the USD” $AAPL was making it’s all time high and digesting this same thought .. (see dashed red rectangle below). The Chinese answered the question w/ a BIG EXPLOSIVE CANDLE … Answer: guess this move weakening the Yuan is real.
Now $AAPL. Note, when the “big move” came by the Chinese AAPL cracked and, since then, has been correlating nicely w/ the swings in the Yuan.
So, cliff notes, pay attention the Chinese Yuan and $APPL together …will this correlation break in the future? Probably but for now as the Yuan continues to weaken against the USD, $AAPL sure seems to be having a tough time …
Let me know if you have any questions … continue to make it a great weekend wherever you are….
B
PS – here’s some work for $AAPL over @seeitmarket
we have taken a look at the FXI and it’s set of “lower highs” since 2011. we have also taken a look at it’s relationship to Copper and how they have ebbed and flowed w/ synergy. what we haven’t done is step back and analyze the BULLISH case for the FXI. YES, I am posting something that could be a major BUY set up. However, it still needs to fall a good 50% in nominal terms. from 37 to 22.
why the bullish case? go back to the low in 2009? From 19 to 48 we can count 5 wave UP. In the context of wave counting that is either a wave 1 or an A wave that will form a 5-3-5 correction. labeled a-b-c. either way, we have a nice BUY in/around the 22-25 area that, if the count is correct, take out 48 and perhaps even higher.
so, stay tuned. w/ MAJOR long term patterns occurring w/ in the US and Global Equity market certainly appears a good thump could be coming but what an amazing set up to BUY…
the count (long term) for copper appears to have completed a very well defined 5 wave move … if this is correct, then perhaps we have a little larger rally to kiss the neckline and then down into much lower prices. why is this important to China? well, from a chart view they are aligned extremely nicely. so, IF Copper is going to go down THEN so should FXI if the correlation holds …
