Saturday, April 4, 2026 
China Stocks
In the final days of July, I mentioned China Stocks being down 5% in a day. There didn’t seem to be much follow through to the downside, so traders piled back in, fearing they’d sold out in a panic. As soon as they all bought back in, the market turned right around and has since sold off severely. The same traders that sold out, then bought back in, are now holding–hoping that prices come back so they can get out at break even. When there is too much hope in a market, as seems to be the case here, it will likely fall until the hope transitions to fear.
The first chart is a daily chart showing the recent selloff. The second chart is a weekly chart. The weekly chart shows that the rally from the October lows was a correction within a larger downtrend.
Shanghai Stock Exchange - Daily
Shanghai Stock Exchange - Weekly
the China stock is pulling back for a wave 4.
Comment by yuqing — August 15, 2009 @ 4:45 am
the China stock is pulling back for a wave 4 I think. wave 3 was at 1.618-2.618. usually wave 4 is 0.38-0.50. the index has not got 0.38 yet. let’s see if there will be a clean trigger for the type 1. some stock alreay under my watch
Comment by yuqing — August 15, 2009 @ 4:56 am
This could easily be the catalyst.
Didier Sornette is a smart dude.
Comment by Stripnomics — August 15, 2009 @ 4:18 pm
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