How has the tariff affected SSEC?

In my last update on China market in SSEC reversing SO SOON? I believed that while many set up indicated an uptrend, we should be seeing a congestive correction instead of a continuation. This was mainly due to a VERY LONG downward bar. 

Indeed, it went into a congestive state even though with lower highs and lows. However, it also the trends overlapping each other. Apparently, other than the initial market shock, subsequent increment in US tariff on China was damped. 

Looking at the chart, it does bring some challenges for me to do a read on SSEC, because there are signal conflicts. Anyway, here it goes.

Fig 1. SSEC weekly chart

Since my last read, SSEC made an attempt to cover the gap, and it did. If based on what my teacher taught, it is not a good sign as it shown weakness.

What's interesting is that it is stopped by 55-, 89-, and 144-week moving average, leaving a long tail and a weak hammer bar pattern. While moving upward, it is much weaker with short bars until it is now resisted by it s8- and 21-weeek moving averages.

There is no divergence on MACD at this point of time. I feel that SSEC is not yet ready to reverse, it is more likely to move upward but continue to congest.

Should it be reversing down from here on, I see support levels between2,922 to 2,985. Crossing this however, the next support level will be 2,816 to 2,842.

On the upside on the other hand, I see Bollinger envelop resistance of 3,447. It will also be further resisted by its 61.8% projection of 3,561.

SSEC reversing SO SOON?

It was 2 weeks ago that I have an entry for SSEC in Is China doing badly? I was adamant that SEC was actually heading upward with resistances between 3,174 and 3,225.  

Even though there are additional levels on my charts indicating resistances between 3,370 to 33,555, I have not included them as I did not anticipate a strong move to reach these levels.

There was another concern, the long term moving averages of 55, 89 and 144-week moving averages were still intact, meaning the possibility that there may be a little more downturn before going higher.

While gapping up the week after my entry, crossing the resistance levels that I estimated, it's climb was milder. 

I went back to KL over the weekend, which normally led to a pause in my entries. This time round, additional alteration of family matter led to my urgent departure back to Singapore. A complete disruption of my weekend.

Meanwhile, I started receiving videos about people getting burnt due to abrupt reversal. "Are they over-reacting?" I thought. Afterall, I just looked at SSEC because of similar claim and it turned out to be false 2 weeks ago.

So I took a look at this counter again this week.

Fig 1. SSEC weekly chart

The week opened with a huge gap up, even violating my 100% and 127% projection, went above the 161.8% projection. Not only that it went much beyond the Bollinger envelop resistance.

The move this week also crossed the previous high, justifying a double bottom formation with objective of 3,711, which it was close to reaching.

Unfortunately, the surge was too strong leading to an equally strong pull back, with SSEC eventually closing within the band and coincidentally, its 100% projection. 

The movement also created a candlestick formation called Dark Cloud Cover uniquely for uptrend. This is a reversal pattern mark the beginning of a down trend. The 2-bar formation makes an equivalent shooting star.

So is SSEC reversing down?

If based on the candlestick formation, there is no need for confirmation of reversal. Furthermore, the momentum of its downward movement this week is strong, leading to the possibility that it would be on a down trend from now on.

The problem is that there was a gap up prior to the incident, and the move this week failed to cover the gap. 

In addition, it hung onto the Bollinger envelop after this forced reversal.

It gives me the feeling that while it may be heading down further in the coming week, there may be limited downside. Afterall, the 55-week moving average support is close by at 3,016. 

There is another scenario though, if SSEC inch back higher with candlesticks of small bodies, it will be indication to me that there is a continuation downward that may eventually surpass the 55-week moving average support level.

Is China doing badly?

 I have been receiving more videos about how badly China is performing at this stage of time. Massive unemployment, closure after closure for factories and eatery outlets and people sleeping on the streets while airports are empty.

It makes me wonder: Is China getting worse? 

It really took a long time for China to reach the level of Asean at the cost of its Neighbours. It was also very scheming to trap countries to go in debt through its One Belt One Road project.

I was very negative on China market for a long while. My last update on China was So Biden and Xi finally met at San Francisco... on 26th November 2023. It was at the time when I noted a potential reversal on CNY, with ration that it was due to the weakening of USD. SSEC on the other hand would continue to weaken with potential support between 2,564 to 2,892. 

It was Trump who stopped China's ambition to dominate with its parasitic behavior.

Is China really continuing on its decline?

I began my investigation with checking on SSEC index. Unfortunately, something is wrong with https://finance.yahoo.com, it hangs whenever I download SSEC chart. 

Eventually, I managed to obtain a reasonable chart for analysis through a chart from https://uk.investing.com/.

Fig 1. SSEC weekly chart

Since my last read, SSEC went to a low of 2,6535 before reversing up, followed by a continuation downward by 20th May 2024, stopped by its 55-week moving average. 

What's interesting is that the downtrend did not break its previous low of 2,635 and surged upward this week, breaking through most of its moving averages, falling short of its 144-week moving average, and the neckline of its supposing head and shoulder. 

Where shall it go from here? 

With such a strong surge this week, it is possible for a correction in the coming week, falling back to the moving average resistance turned support.

Nevertheless, there is a high potential for it to go further after its correction with its next objective of 3,225. It depends a lot on where it can break the neckline. 3,174 will also be a crucial resistance as this is the previous high.  

Meanwhile, with its close to 5-year head and shoulder setup, there is still a chance of downtrend. Then the support will be between 2,006 to 2,335. For this to happen, 2,692 is crucial.

What about its currency, CNY?

Fig 2. CNY weekly chart 

CNY broke through the 7.0275 neckline of its double top formation this week, giving a potential objective of 6.7045 with support at 6. 8263.In addition, its double top formation also provides another range of support levels. It breached its 61.8% projection support of 7.0723 last week with the next range between 6.8551 to 6.9459.

It is likely CNY will continue to strengthen against USD.

At the same time, it is possible for the move this week to be a false break with CNY correction back to its 55-week moving average presently at 7.1596. The possibility of it continues upward (CNY weaken against USD) for the time being is low.

After thought:

After finishing this entry, I find it not really to my satisfaction. It seems that I have reservation on my view on the situation.

For SSEC, I am bullish with exception of a possibility that it may reverse the coming week, if the reversed bar is longer, then we should expect a continuation downward. 

However, when I looked at the daily chart, I saw 3 consecutive long bars with gap in between surging up. This made me feel that it is bullish at least on daily chart, if reversing down this coming week, I believe it is only a correction, with its 8 and 21-week moving average as the support. While the bars may look long, I should expect short bodies overlapping for the coming weeks.

The entry on CNY is much shorter than I have anticipated, because the pattern formed is relatively straight forward.

Why am I having reservation still?

The pattern is too obvious, this causes me to have some self-doubt that if 90% of the people see the same thing, it will lead to the counter to behave differently.   

 

 

So Biden and Xi finally met at San Francisco...

 I practically did not trade this week. Not because I am lazy or procrastinate. I had a lot errant to run. 

On top of being the chauffer for my family, mother-in-law (for her clinical visits), and sending my car for service leading to a repair cost of SGD3,181, an "accident" happened on Monday evening with a forward parked car reversing out knocking onto the door of my car from the driver side. Even though it is the fault of the other car and that there was no damage noted from my car, while the rear view mirror of the other car was slightly tilted forward (with no damage neither). I had to make my way to the accident reporting center in case the other side decided to pull a fast one on me.

That cost my whole week.

Anyway, enough of my rant. Back to charting.

What happened recently? Oh yes. Xi met with Biden in San Fransico, USA on November 15th 2023. Was the meeting fruitful? I doubt so, especially when 2 of the worst performing world leaders meet.

What meaningful conclusion can be derived when neither can have consensus with the other?

One thing I suspect is China's ... or Xi's leadership is in jeopardy and the economy of his country continues to weaken. Xi must be very desperate to leaving his country risking potential coup from his party members. 

While the Chinese Communist Party maintained an appearance that everything is fine in China, it is not from ground level, otherwise Hang Seng will not be at where it is today.

How is China faring from technical analysis point of view?

For this entry, I will look at CNY and SSEC.

Fig 1. CNY weekly chart

My last check on CNY was surprisingly quite recent in CNY- an indication of health for China's economy dated 10th September 2023. 

I was of impression that CNy will continue to weaken against USD considering the trend of the chart. I estimated short term resistance at between 7.37439 to 7.54820 while a long term resistance at between 7.7293 to 8.0086.

While CNY broke the previous high with a new peak of 7.3510. Iit was stopped by the Bolinger envelop before reversing downward, falling short of my resistance estimation.

Is CNY reversing? It seems so, at least from MACD indication, that demonstrated multiple divergences. 

By the end of this week, it fell further, only to be stopped by my trusty 55-week moving average. The downward momentum, however, seems strong. I suspect it may pause at this level momentarily before heading further south.

For the moment, there at least 2 more support that I will need to take note on. The 89-week moving average at 7.0926, coinciding with a high on March 5th, 2023 at 6.9762. This will follow byu the 144-week moving average support presently at 6.9045.  

My rationale for this trend is not that CNY is getting stronger, but the weakening of the USD, as observed from my analysis published in Did SGD get weaker? dated November 19 2023. So may be it is not conclusive with CNY analysis alone. 

Let's look into the SSEC, short for Shanghai Stock Exchange Composite index.

Fig 2. SSEC weekly chart

My last check on SSEC was, surprise, surprise! done in August 7th, 2022 titled After thought of HKD and China indices. I cannot believe that it was so long ago!

At the time, I estimated SSEC with a down trend, estimating short term support levels to be between 2,579 to 2,901 while long term support between 993 to 2,038.

SSEC reached a low of 2,863 before reversing up. This is within my short-term support range. It did not go far, failing to reach its previous high of 3,708, stopped by a concentration oof moving averages, twice.

As far as I am concern, China economy is stagnated. I remember an entry I have made on China titled Is this the end of the China miracle? in January 26th, 2016. That was my first entry after I restarted my blogging project. 

In that entry, I noted the fall of SSEC from its second peak and estimated support at around 1,700, and with possibility of falling further.

It went to a low of 2,440 in 2018 before bouncing back up. 

While it has achieved higher highs and lows since then, they overlap each other, indicating a pattern for counter wave congestion. This means that it will likely continue downward once its 3-wave pattern has completed.

In addition, its development since then as created a potential head and shoulder, giving more indication of its intended direction.

Based on its major move, the long-term support level is estimated to be between 1,002 to 2,044. The short-term support level on the other hand lies between2,564 to 2,892. 

What about the head and shoulder, using Fibonacci expansion, the objective is estimated to be 2,003. This however, requires SSEC to breach its neck line, it might lead to a higher target which coincide with the long term 61.8% projection of 2,044.

There is still a possibility of SSEC heading the other way, should SSEC break the congestion band upward, this is less likely presently. It may reach an objective of around 4,000.

After thought of HKD and China indices

In my last post, I mentioned of thinking about an after-thought entry on HKD. One of the reason was that I felt something is lacking. This mainly about the point that China needs USD. 

It is my belief that China economy has not been doing well for years. Its market in saturation, overcrowding competition leading to price focus and a lack of innovation even though with such large population. 

The events that follows such as trade war with USA and China's obsession with country lock downs to tackle during Covid-19 did more harm than good to the economy.

However, the one and only killer to China is the 5,000 years of Chinese culture itself.  Many might think that with 5,000 years of history, Chinese culture is rich and diversified.  Yet as a descendent with Chinese lineage, I find Chinese culture to be very closed and confined, drawing a line to confine Chinese to within our community. 

In Psychological term, we can classify the Chinese behavior as centripetal nature, it is hard for Chinese to break out of the gravitational pull while rejecting foreign influences. Since young we Chinese are taught the tradition that we have, the rules we need to follow. 

Chinese New Year for instance, while with grandiosity and richness, is a very suffocating event for me for years. To be honest, the Chinese New Year during Covid-19 lock down was in fact the best I had, with no burden on me to perform my duties. I actually  longed for another Covid-19 like lock down.

While pursuing my career, I once resided in China for over half a year in 1997, I witnessed the death of Deng Xiao Ping and the hand over ceremony of Hong Kong on TV. I also experienced the propaganda machine first hand.

On one hand, China longed for foreign investments that the country needed desperately. On the other, they loath the increasing foreign presence in the country. If you watch TV in China, you will definitely notice the daily bombardment of anti-foreigner TV programmes glorifying how China beat any foreign invasions, especially that of Japan which China still deem as their mortal enemy. 

In fact based on a study from China Uncensored The Ridiculous Japanese Devils of Chinese TV | China Uncensored demonstrated over a billion of Japanese killed in WWII.

The purpose of Chinese propaganda is not because they hate foreigners, they need the foreigners. What they want is to avoid the locals to engage positively with foreigners, telling people of the evil of foreign corruption instill fear in people of outside influence and only follows the direction set by the government itself.

Enough of detours that happens every time I work on articles involving China. Let's go back to the main point of this article.

If you go through the glorious history of China,  you will find one common pattern. While the emperors are deemed the  sons of heaven, there is never a short of threat to overthrow and kill them. They constantly suspect people around them and strike down on anyone who even voice objection to their decision. 

The outcome is having people who not only understand but to embrace this mindset to their advantage. They constantly praise their emperors, gaining deep trust and power, thereby becoming the person " below one person but above others". Fame and riches follows.

Yes, nepotism and corruption are the only cultural inheritance of Chinese culture. It is infused into every aspect of China, be it  politics, businesses and families. We constantly see the working of inner circles to expel people of different views to ensure the continuation of the power that they gain.

This is also the reason I see why China ALWAYS go into a cyclical phase of dynasty change. Borrowing from a Buddhist philosophy: human consist of birth, age, sickness and death, matters consist of form, existence, deterioration and disintegration. 

Communist China is to me coming to a complete cycle. Closing down of manufacturing, property crisis, creeping unemployment and lately with banks refusing people of cash withdrawal, the golden era to me seems to be coming to an end.

At this point, I must say that my view point when it comes to China is personal, bias and with prejudice, therefore if any reader going through this work of mine might want to take it with a pinch of salt.

Enough of my rant on China, let's move on to charting. 

In my last entry on HKD, I mentioned that if HKD is without its peg, it should be heading lower against USD. I have been using the weekly chart for my read at the time, which give me a sense of its major direction. Of course the peg will continue to hold it back.

However, how is the Hong Kong central bank doing with its peg right now?

Fig 1. HKD Hourly Chart

Instead of the weekly chart, I opened up the hourly chart that provides detail into the progress of HKD. Never have I seen such a long series of hammers testing the limits of HKD7.8500. Earlier on I wondered what it meant by forex reserve of USD to maintain a stable exchange rate HKD. 

Then I recall similar pattern seen on penny stocks years ago when I witnessed block buy and sell to maintain the counter to remain within a narrow zone. So what the Hong Kong central bank do is not only having sufficient USD forex reserve, but to use this reserve to create a block buy of HKD at price of HKD7.85 to USD1.00.

Life must be tough for the Hong Kong Central Bank right now as the selling pressure on HKD is so strong right now. It is not because of some global funds trying to break the wall, it is a market dumping of HKD, meaning an exodus of investments.

While the the price of HKD7.85 remain intact, cracks is observed at some points when HKD reach a lower level of HKD7.802 and HKD7.803.

Let's move on to China. I mentioned the tight control of China indices in the past and it may not worth looking into. I have decided to take a peek into Shanghai Composite Index (SSEC).

Fig 2. SSC Weekly Chart

My last entry with SSEC was in January 2016 "Is this the end of the China miracle?". I mentioned of the potential of China heading lower with support at between 1,600 to 1,700.  

It went into a low of 2,638 before it congested, eventually descended further to a further low of 2,440 before it gradually climbed back to a high of 3,731in February 2021. 

Strictly from the pattern point of view, I continue to see a 3-wave movement for SSEC since Oct 2008.  and ever since January 2016, SSEC again on a side trend before the start of its descend by 12th December 2021.

For the moment, I am not seeing a bottom formation, but a long pause on SSEC. Translating to economical term, China has has been stagnant since 2016.

Is it going on its way to complete its move now?

Fig 3. SSEC Weekly Chart Zoomed in

I am limiting the time frame of the chart to between 2016 to 2022 to study the more recent development. As a whole, it looks less of a reversal and more of a possible continuation pattern. 

SSEC conforms more to the zig zag behavior. Using this as the basis for measurement. The next support level is 2,038 with worse case of 993.  

On a shorter term, using the more recent peak, on 12th Dec 2022, I can see support at 2,901 follows by 2,579.

However, whether SSSEC will reach the ridiculous level of 993 really depends on its reaction to the neck line at 2,440. At this point, it is possible that SSEC will rebound but not reverse, creating the right shoulder before commenting descend. If this is the case, the damage is less with support at between 1,584 and 1,731.

SSEC follow up

I went on leave today. It is my daughter's official registration for primary one. I was a little strange that the school asked us to be present by 10:30AM. So my wife and I took time off work to go through the process.

What the school did not tell us was that they have also arranged vendors to be at the school. So we did not bring our daughter there for purchase of uniforms and shoes. Nevertheless, we did complete the school bus registration and purchase of all the books.

I was also quite surprise that my daughter belong to the green house, because I belonged to the green house too when I was in primary school.


Fig 1 SSEC Weekly Chart

Now back to chart, my last up-date indicated SSEC having more chance of continuation than reversal. That was the time when it was in a congestion band. Well, it did break out on the up-side. In fact, it reach an objective of more than what the rectangle indicated. In all it was an objective of a swing move.


Fig 2 SSEC Daily Chart

Now I am using a past tense because SSEC's indicators are showing weakness. The weekly ones seems reversing while the dailies not only reversing but on divergence. So SSEC is likely to follow the rest on reversal.

At present there is a support at 2,981 while 21 weeks moving average at 2,796.

The rectangle on SSEC

It has been a while since I looked at SSEC. My ast check was that it should be heading south, it did but not as south as I expected it to be.


Fig 1 SSEC Daily Chart

A look at the chart today, I see that SSEC has been congesting for quite a while. the congestion leads to the formation of a rectangle. The measurement of the pattern means an objective of 2,840.

On the other hand, if we are to see this as a double top reversal, which is possible. It should be heading for 2,420.

So what would it be? Both indicators are at the bottom and trending back up with the chart near the lower envelop of the rectangle. My guess is that SSEC is going to bounce tomorrow.

HSI, SSEC, Nikkei225 and STI and patellar Tendinitise

I woke up at 5:30AM this morning with cruciating pain on my knee cap. I was already having this mild pain the last few day, it was discomforting but not to the extend of immobilization. It was different this morning, more likely the result of constant kneeling during yoga session last night. I could not afford to bend my knee without inflicting jaw biting pain.

First thing I did was to create an ice pack to relief the pain, I recall the doctor recomendation of ice pack was the best way to reduce inflamation, and I did just that.It help to some extend and I still needed to endure the pain every time I move my joints even by a 5 degree angle.

I finally saw the doctor by 9:30AM. I was expecting some outcome like artritise or uric acid as the cause of my pain. But Patellar Tendinitise really came as a surprise to me. It seems that I have a mild injury on the muscle attached to my knee cap ( the triangular muscle right below the knee cap ), and the kneelings done last night was the catalyst for the inflamation. He told me that the problem will last for about 2 weeks. There is a quick way of injection which will allow the inflamation to subside in a few days time or the long way of taking medication ( mainly pain killers ). I chose the long way.


Fig 1 HSI Weekly Chart

So much for the Patellar Tendinitise, let's look at HSI. I have earlier created a narrow channel which HSI would be moving for a counter wave. Well, it is likely to have completed the d wave and now fulfilling the e. This also coincide with the downward movement of both Stochastic and RSI.

If e wave is true, its objective would be around 18,280 before it reverses with C wave of target 30,1265 base on a swing move. It seems like HSI is not really in that bad of a shape afterall, that is if my judgement is right.


Fig 2 SSEC Weekly Chart

I have in my earlier entry identified the symmatrical triangle on SSEC and that it is in progress of fulfilling its destination of 2,043. It is still half way there, pausing at the moment.

However, the indicators are again turning south, what's more, there is a small divergence on RSI. This also coincide with the chart reaching the apex of the Gann grid line, crossing from positive to negative gradient. SSEC is going to continue its journey.

For the moment I am having another thought. The short pause of SSEC created a possible scenary of a swing move, this would lead the index further south to 1,818. Seems like China is not really doing well.


Fig 3 Nikkei 225

Nikkei 225 shows quite a clear picture. A 5 wave (abcde) pattern forming an up-ward wedge, broke downward and heading for 8,359. It paused briefly (a few months) probably due to political uncertainty then. I am sparing a thought of using the swing move measurement again. If apply to Nikkei 225, its next target should be 7,701.

So far things aren't that bad even with 7,701. Its previous low was 7,000 in end 2008. In addition, both RSI and Stochastic is bottoming, of course it may be possible that these 2 could stay for a longer period of time, but they are not giving much leeway for new lows.


Fig 4 STI Weekly Chart

If I am so negative about the above 3 indices, what do I make out of STI?

The interesting thing is that the indicators (Stohastic and RSI) as bottoming and turning (RSI). However, I feel that this is more as a correction than reversal. For one the indicators movements are more aggreesive than the chart itself.

So far I have seen no clear pattern for measurement, so base on its resistance, STI may reach 2,947. In addition, its 21 weeks moving average is supporting at 2,894.

So far, STI seems to be out of phase with the other 3 markets which are exhibiting more negativity. However, it is unlikely to diverge from the rest of the world, it would eventually have to follow.

A reveiew on SSEC chart

It is 10:00PM at night and I am now in Shangri-la Golden Sand resort. My wife and children are in bed right behind me while I am keying this entry at the work desk in the hotel room. One good thing about hotels and resorts in Malaysia is that they all come with free internet access and WIFI service. This is one service which hotels and resorts in other country requires a price to pay.

While one may think, " Wow! Good life you have there!" Its not actually as good as you might think. If you search the hotel location on Google maps, you will realise that it is way out of the town area. A taxi ride one way will need MYR30 per direction and it takes almost 30-40 minutes to reach even the outskirt of the town.

It is also highly humid here and it is a rainy day today. We were walking out for dinner and it is as if we are soaked in water when we came back to the hotel. It is not because the rain was heavy, the moisture on our body simply refused to leave.

The place isn't that great in the day because all shops are closed. It is only in the evening time the street side market started to open, which ended up looking like Phuket or Bangkok's night market. However, the ambience is a far cry from that of Thailand. There is not enough space for pedestrians walk and you are on the road from time to time. cars just zoom by and we can't help but to feel insecure most of the time here.

We went for dinner at Eden. It is a well known restaurant in Malaysia. We noted that it is the last night of opening at the Ferringhi's branch because the place is going to be renovated and re-opens only by July. So We thought it might be a good idea to eat at the restaurant on its last day of opening, and boy were we wrong.

The restaurant did not take in any stock, so they run out of fish, prawn, crab and even chicken. We just managed to order a few dishes which was still available, nevertheless, the dinner tasted quite all right, and ambience were satisfactory. We ate right next to the beach, seeing people para-gliding, riding horses, jet-ski, etc. The only problem was the pesy flies disturbing our dishes.

Anyway, I have decided to type something on the shart again. At first I was really finding little to talk about, STI and DJIA are where I expect them to be, nothing much neither on USD. Nikkei just started its way down after the wedge break out. So I took a look at SSEC.


Fig 1 SSEC Weekly Chart

My last entry noted a triangle broke out for SSEC and I was puzzled about having only abcd waves while lacking the e. When I looked at it again it is different this time round.

On weekly basis, because of the removal of some details, the major waves look much clearer. The down trend from OCt 2007-Oct 2008 was no doubt the A wave, the move from Oct 2008 till Aug 2009 was the A of B wave, and from then till now is a B of B wave. The B of B itself is a 3 wave pattern which completed a, b and now doing the c.


Fig 2 SSEC Daily Chart

Looking into the finer details of the Daily Chart, the triangle is not so valid since the lack of the e wave. However, I notice another pattern of a head and shoulders with a smaller left shoulder.The pattern already completed and SSEC broke out of the neckline at 2,973. The objective of this head and shoulder is 2,419.

Of course it won't head there in a single move, it still has to go back and connect back with the neck line before going further down. Already it is meeting the Gann Grid support (+ve gradient) and the indicators on both Daily and Weekly basis are at the bottom. So this index is poising to move north. I think it is likely to follow the positive gradient of the Gann Grid and would need to question its position again by 2,924 (Gann Grid Apex).

SSEC Symmetrical Triangle

Just happened to saw some guy's thread in CNA forum this morning bragging about SSEC's triangle and that how come no one mentioned about it. He has definitely not read my blog and my entry on SSEC.

Another guy talked about SSEC not buying "fake" DOW recovery. Well, I can only tells him that it is not that China does not believe in the recover, it could also be investors channelling funds away from China and move it into USA.


Fig 1 SSEC Weekly Chart
As can be seen, SSEC has now broken its triangle envelop and moving towards its objective of 2,287. However, in the short term, it is likely to retrace back to the envelop that it has justbroken down from. Anyway, it is closer to the negative Gann Grid line so it is negative in general direction.

Wave Count of SSEC

I have been following up on the Malaysian by-election at Ulu Selangor recently. They day of balleting day is tomorrow. The whole event running up to polling day has been nothing less than furious fight between the two parties. The stakes are high for both side. If BN wins, it is a sign of reversal into BN's direction. If PR wins, Zaid would be officially be entering the Parliament.

Both teams uses a lot of the smearing campaign, of course, as usual, UMNO continues to dump money to buy more votes. For this round, I worry for PR. Their performance lately has how should I say? Rather disappointing. The alliance has done more in trying to fight against BN rather than strengthening their position. That means they have been slack in serving their constituency. Of course BN never did in the past. But such action from PR only let people think that they are no different from BN, so why change the vote?


Fig 1 SSEC Weekly Chart

Anyway, enough of that and this time I look at SSEC again. My last entry indicated much difficuties in counting its wave. I am still having the same trouble. From the weekly chart, a symmetrical triangle is in progress. Having been through a 5 wave down much earlier, SSEC should be in progress of a 3 waves up. The symmetrical triangle seems to denotes a 'abcde' B wave after an A. However, I am unsure.

For one thing, the movement from Sept 2008 to Nov 2008 is a 5 wave movement DOWN, so I have to consider that this is a mega-A wave. Therefore it should now be in process of B wave. If I consider the movement from Nov 2008 till Aug 2009 to be A of the B wave, the triangle would be its B wave and C should be after that.

The number of wave that I see on the triangle is 'abcd' it short of an 'e', meaning uncompleted.


Fig 2 SSEC Daily Chart

Here is my delima, on the daily chart,I can see that SSEC is in process of a potential flag. This is not good because SSEC is breaking the lower envelop as we speak, or as I speak.The result is a minimum objective of 2,783. If this come true, the next to happen would be the fulfillment of the triangle's objective, 2,293. If the daily scenario comes true, then what we see now is a completion of B of B wave and moving into C of B.

As for the indicators, the weekly indicators are turning down although there is not divergence. Divergence is not very common in weekly chart, although there are times we see it. So it is quite safe to deduce that we are seeing a C now.

the indicators on daily basis is on the other hand at the bottom, however, I would expect a formation of divergence before they moves up. This would mean SSEC going further south before its reversal.

I do not see SSEC to be a good place to stay for the short term. Unless, the lower envelop of the triangle manage to hold and the flag formation fails. Then the triangle complete with the e and thus moving up next to complete C, not C of B. Base on the indicators, the odds for this is much lower.

SSEC, a very short time frame for exit

I wonder at times, "why do I write my blog?" I mean I am writing something here, revealing my thoughts to people whom I do not know. Isn't it a little bit dangerous because you don't know what people will do to the information that you give out.

I studied Electronics Engineering at school and language was not my strength. I have bare pass in my English during my "O" level and I struggled through my essay. Writing has never been what I want to when I first came out to this real world.

I guess writing blog is a way I can let out my emotion. It also allow me to be another person, going into a virtual life. For one thing, there is not much plan when you write a blog, you just let your feeling flows (sound a little like Star Wars, isn't it?).


Fig 1 SSEC Daily Chart

I was going through SSEC and noted the plunge. In fact when I check up the Forum this afternoon, people were commenting that it has gone down 4.5%!!! This is huge. Looking at the chart, the indicators give very little allowance for people to react. It was only last Thursday that both RSI and stochastic reached their peak, indicator reversal on Friday with divergance declared. There is almost no chance for people to get out if they have not done so last week.

SSEC only stopped at its support of 2,981. Its RSI is already at the bottom, so most likely it is slowing down in the short run. The good thing is that the Gann Grid is on positive gradient, so there is a possibility that the gradient will support an upward movement. Noting that the US DJIA is more or less stagnant for the time being, probably SSEC will be moving higher tomorrow. But that does not mean the worst is over. It could still be a retracement and it will head further south after that.

SSEC reversal

It was a few weeks ago that I first chance upon SSEC due to the Forum "hot topic". I have last predicted a fall of maximum of around 500 from its top of probably 3,478
to a level of 2,939. This is base onFibonacci calculation of a 4th wave retracement which is 0.382 of wave 1 to 3. It went further than my expectation to a level of 2,761.



Fig 1 SSEC Weekly Chart

At the end of last week, SSEC seems to have ended its downward trend. In fact it created a hammer after a gap down. This is a good sign because it signifies a reversal. However, we should not be too happy yet because we still need a confirmation, which is this week.

The signs are good today with opening higher thanthe previous closing. Yet, we have to wait till the end of the week for a full confirmation. Should it be a long candle bar, if that is so, the hammer would then be a morning star, which gives much confirmation that SSEC would be up the next week.