Shanghai: SSE Composite Index (.SSEC) US-China trade war concerns
China’s stock market, having ceded its position as the world’s second-largest to Japan, continues to lose value and is now worth five times that of Apple Inc. At its peak in 2015, China’s market cap was more than $10 trillion. It’s almost halved in size since then, to $5.73 trillion as of Tuesday. That’s 5.3 times Apple’s $1.08 trillion value, the lowest ratio since 2012, data compiled by Bloomberg show.
The benchmark Shanghai Composite Index fell further Wednesday, at one point threatening to close at its lowest since 2014 as concern over the trade dispute with the US continues to weigh on sentiment. Investors are largely ignoring valuations below historic averages and attempts by state media to encourage value investing.
With $2.66 trillion wiped off the value of Chinese equities since January, the sell-off still looks far from over, according to KGI Securities Co. analyst Ken Chen. “The real bottom for A shares will only emerge when we see a firm rebound in the economy and China completes its deleveraging drive to resolve financial risks.”
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 2,751.25.
The projected lower bound is: 2,556.85.
The projected closing price is: 2,654.05.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 8.8081. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.41. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 47 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -139.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 4 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -8.690 at 2,656.110. Volume was 30% below average (neutral) and Bollinger Bands were 37% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,702.29 2,770.19 3,107.15
Volatility: 15 22 21
Volume: 10,320,382,976 12,567,814,144 15,277,244,416
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
SSE COMPOSITE is currently 14.5% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of .SSEC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 19 periods.