Evening Analysis / AbendAnalyse / Analyse du Soir / Analisis por la TardesShanghai daily
In the last quarter 2006 the market even broke out to new all-time-highs. 2007's first daily candle was weak, the second weak candle positively engulfed by a steep neutral one. Then the market continued the steep rallye, even after the plunge on February's last trading day, consolidations paving the way up. This pattern is continued in September with another all-time-high. October continued the rise until a deep correction over Oct/19. This in turn was terminated by another surge, which, however, failed to arrive the old high end of October. The slump of November led to a breakdown out of a dangerous 'descending triangle', two weak candles starting a shortterm downtrend. But then the tide turned up again, three strong or neutral candles preparing for a steep neutral one, destroying the resistance at the high of early December. But this strong breakout of a strong bottom pattern is ridiculed by a sudden breakdown with four weak candles and a strong one negatively engulfed by a weak one. Last week's two first plummeting candles even cancelled the strong bottom pattern of December, two strong ones after, Thursday's weak one in between, overwhelmed by Monday's plunging weak one. Tuesday's neutral one is cancelled by the weak one after - only little more support.The long uptrend of last year was resumed in August, after two major correction, trampolining the index up above 6000 to a new all-time-high. But Oct/19's weak weekly candle with the three following weak ones into November established a new shortterm downtrend, a neutral one immediately wiped off by two weak ones. December's higher neutral one is neutralised by a weak one, but then a steep strong and three higher neutral ones attack the downtrend by building up support against a large top pattern. But two weak ones even break the support level of a dangerous 'descending triangle'. The two moving averages rise in tandem again - this is contradictory.
The monthly candles of June 2006 and July were weak, but that one of August was strong, September's steep neutral - a strong three months pattern, leading to October's and November's steep neutral and December's neutral candle explosion, breaking out to new five years-highs by breaking the resistance at the high of 2001. In 2007 the rise continues with four steep neutral candles, those of March, April and May even being abnormal high. So June's weak candle takes off a little overheating and is positively engulfed by July's steep strong one, rising to another all-time-high, as does August's steep neutral and September's higher strong one. October's steep neutral one even hits the magic number 6000. November's weak one is the overdue correction, terminated by December's neutral one, both leaving even the steepest shortterm rise untouched.
The first two quarterly candles of 2006 are neutral, the strong third one leading to the steep explosion of QIV and in QI 2007 into uncharted territory above the old highs. The neutral quarterly candle of QII is steep again, the strong one of the third quarter steep and of the strongest type to exist. This is the most overheated chart we ever have seen in the last 20 years, so the fourth weak quarterly candle takes off some steam. But this doesn't exclude that it even will become more overheated in 2008. How high this can continue without a crash? But note that this strength can be found only in class ,A' shares. Since there meanwhile is a strong coupling to the western stock markets - no crash on Oct/19/2007.
Taipeh daily
continued in 2007 the uptrend of 2006 until the worldwide plunge of black Tuesday end of February threw the index deep below its lower support level. After falling below its technical target at 7400, the market turned around to a steep uptrend until mid April the trend turned around to a flat downtrend. A breakout to a seven-years-high end of July collapsed until arriving at a technical target downwards. In August enforcing corrections, September continuing sideways, but with a slightly strong feeling. October resumed the strength, even steeply, until Oct/19th failed to break the resistance at the year-high of July and started a deep correction. Another attack onto the year-high failed and November started a plunge with three sections, two shortlived corrections in between. End of November the trend up again. But four plunging weak candles, a strong one in between overrun, terminated this uptrend and even destroyed any support since November. In December a strong and two neutral ones, a weak one in between, aren't yet executing the strong three-days-pattern of type trend-reversal. The first two weak plunging candles of 2008 were neutralised by a strong one after. So last week's three plummeting weak ones were disappointing, two higher neutral ones cancelled by Monday's weak and negatively engulfing one - Tuesday's neutral one neutralised by the weak one after - fighting for support.The steep rallye continued in 2007, arriving after corrections at a first all-time-high in July, when four weak weekly candles plunged the market into another deep correction. In August a steep rise built up a strong bottom pattern. After a sideways trend November's first weak weekly candle failed to resume the uptrend, negatively engulfing four preceding ones, being reflected by this 2000 all-time-high. The second weak one even plunged below 9000. The third neutral one immediately is wiped off by the fourth weak one. Hence a strong one and a higher neutral one enforce the support below, a support-destroying weak one after not yet neutralised by the two neutral ones closing December. The first weekly candle in 2008 is weak again. The second much lower neutral one increases the support at the lower support of a dangerous 'declining wedge'. The two weak ones after even are a weak three-weeks-pattern. The two moving averages devil crossed each other in December and start to decline in tandem.
The monthly chart gaines strength from four neutral, steep candles and a strong one in December, continuing the long uptrend since 2001, and an angle's crossing of the two moving averages already in September. January's weak candle is positively engulfed by February's steep neutral one, March's candle is very strong again. So April's disappointing weak one shifts the breakout to May with a steep neutral candle, June's and July's steep neutral candles are a typical breakout of a strong bottom pattern. The August candle is lower, but very strong, that one of September is steep and strong, building up the strongest three-months-pattern to exist. So Octobers neutral candle breakout is classical chart theory and 2007's two final weak candles are and overdue, but deep, correction.
Two strong quarterly candles 2006, with a weak one in between, lead to a steep strong one in QIV. QI'a weak candle is wiped off completely by the steep neutral candle of QII, overwhelming strong resistance from 8000 up to the absolute highs of the year 2000. But even the higher strong candle of the third quarter doesn't bridge the gap to that old high yet, the weak and negatively engulfing fourth one of 2007 even opens the gap further.
Hong Kong daily
resumed in early 2007 the uptrend since mid 2003 as well, the plunge of end of February overcome by a rise to a new all-time-high at 21 000, but then the market started to correct. Since mid May the market plunged, until a sudden strong candle on May's last trading day prevented a crash. But the uptrend after stagnated early. August plunged until a strong candle started a rallye, motivated by good news from Tsientsin. September opened sideways until three strong ones candles broke out to high strength and new all-time-highs. October continued the rise with an all-time-high in the last days. But November started a downtrend. Before Christmas two strong ones are a strong three-days-pattern, a weak one after overrun by two steep and higher neutral ones, excecuting this pattern. But the two candles after Christmas were weak. The first two candles of 2008 are a plunge, the third steep neutral one only closing the gap in between. So the market is heavily fighting against weakness. The five candles over preceding weekend were weak again, three 'black ravens' execute a plunge on Wednesday. A strong and a neutral one closed last week with a little more support, but the two weak ones of this weak destroy this support, Wednesday's higher strong one closes a gap only. Thursday's weak candle is neutralised by Friday's strong one, but this week commences with three weak ones.The steep uptrend since mid June was resumed in 2007 until black Tuesday end of February with a deep weak weekly candle. The strength after was able to build up a broad strong bottom pattern, terminated successfully by a steep breakout in June, the market arriving at a new high in the second half of July. A deep correction led to another steep rise to new all-time-highs, but the first four weak weekly candles of November start another correction. A strong weekly candle and in December a higher neutral one were overwhelmed by five weak ones, a neutral one in between - breaking down out of a dangerous 'descending triangle'. The latest strong one may turn out to be of type one-week-reversal. The two moving averages no longer rise in tandem.
The strength of the uptrend since 2003, and the fight for a breakout, is seen best from the monthly chart, June's strong monthly candle being continued with neutral, but steep candles for July and August, September's very strong one leading to October's, November's and December's steep neutral ones and new absolute highs above that of the year 1999. January's candle is neutral again, but negatively engulfed by February's weak one. But this in turn leads to the very strong candle of March and the steep neutral one of April - a strong three-months-pattern, leading to the higher neutral one of May and the steep neutral candle breakout of June, July's steep neutral and August's very strong one leading to steep neutral ones in September and October, continuing the explosion. Hence 2007's two final weak monthly candles are an overdue correction.
The quarterly candles of 2006 are steep neutral or strong, the first one positively engulfing that one of QIV 2005, the strong third one sending the index up above the old absolute highs of the year 2000. In 2007 QI's weak candle is wiped off by QII's steep neutral one, the candle of the third quarter is steep and strong, the fourth neutral one even tried to break 30 000, although not successful in the first attack.
Singapur daily
The first two daily candles 2008 are a plunge, the steep strong third one a positively engulfing one, but this week's two declining weak ones are not compensated for by Wednesday's neutral one. The candles after are swallowed by an index crunch in Singapur without daily candles. Two candles since Tuesday are weak again. The two strong ones, closing last week, are overwhelmed by Monday's plunging weak one. Three strong ones after, Thursday's weak one in between, are no trend-reversal yet since this week's three candles are weak again.The weekly picture continued the uptrend until mid July, then plunging into a deep correction. The uptrend was resumed in mid August until a breakthrough to new all-time-highs in mid October. Oct/19th weak weekly candle negatively engulfs the two preceding ones. A steep neutral candle was overwhelmed by the first four weak weekly candles of November, falling out of a 'descending triangle' even below the high of this summer. The strong one after and a neutral one, overwhelmed by four weak ones, two neutral ones in between, break the lower support level, the 'neckline' of a dangerous descending triangle. So the steep strong one of last week is no rescue yet. The two moving averages devil crossed each other in December.
June's strong monthly candle, leading only to a weak one in July, is continued with two strong and a steep neutral one since August, and steep ones in November and December, breaking out to new absolute highs above that of 2000. January's higher candle is neutral again. February's weak candle is positively engulfed by the steep strong one of March. Thus April and May's steep neutral candles are no surprise, even June's and July's weak ones keeping the midterm uptrend intact. Both and August's weak one are positively engulfed by September's steep neutral candle, October's strong candle a steep breakout, confirming an angle's crossing of the two moving averages in September 06. Hence the two final monthly candles of 2007 are an overdue correction only.
The quarterly candles of 2006 are neutral and strong, a weak one in between, the steep neutral one of QIV breaking the resistance at the high of 2000. Those of QI and QII in 2007 are steep neutral ones, the higher one of the third quarter even is strong. The fourth weak one is negatively engulfing, thus reducing the acceleration before, but the longterm uptrend remains intact.
Parallelics
sees two markets in intact downtrends, Taipeh against nice politicals say anschluss to China. Hong Kong and Singapur show the first strong recrossing after an intact downtrend. No chinese stock market bowed to the Oct/19 crash syndrome, the weakness of November and the heavy fighting for a turn around of December and the plummet of January originating in too steep surges in the first half of 2007. First time in history, the chinese stock market ruled the waves, at least end of February and in March! But exactly this market, which started the worldwide woes on black Tuesday end of February 07, is behaving after as if nothing happened and is immune against the subprime woes of this summer.The daily Yuan comment
It has broken the barrier 800 Yuan/$ (resp. 12.50 $/100 Yuan) and the support (resp. resistance) there on Thursday 22. Jun 2006 first time and more barriers after. The uptrend against the Dollar since is intact, corrections included. This leads to drastic new highs even after the Christmas break. But why the Yuan is weak against Euro and Rupee and why is the Hong Kong Dollar pegged to the US Dollar instead to the Yuan? In 2007 it has lost considerably to the Yuan, with drastic consequences at the border between Hong Kong and Shenzhen.We anticipate strength also in 2007 for all four stock markets, on top mainland China - like in India, Europe, Wall Street - but not Japan - and relatively stronger than there. At the moment we shift our expectation of severe corrections to the summer 2008, perhaps a minor one in the early days of the year - even a black Friday on Oct/19 was unlikely because there was a lack of technical preparation in early October.
Remark: The only correlation between these stock markets is between Shanghai and Taipeh, by no means between Shanghai and Hong Kong. This offers the opportunity of investing at different risks.An elegant method to invest is by ETFs, for instance using State Street's Shanghai 50 powerShare ETF, AMEX Ticker PGJ. There is the iShare ETF on 25 chinese stocks traded in NY, tickersymbol FXI, and since summer 07 in Hong Kong the WISE CSI 300 China Tracker with the Hong Kong tickersymbol WISE. Among chinese stocks traded in Wall Street there even is a small universe of solar stocks, TSL, STP, LDK and YGE on the big board, JASO, SOLF and CSUN on the NASDAQ. LDK Solar and Yingli Green Energy YGE since June 07. Betting against China, i.e. betting against the FTSE-Xinhua China 25 fund FXI, is also possible since Nov 2007. But be cautious, the ProFund ETF with the ticker symbol FXP is not only short, but also leveraged.
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