Wednesday, 19 August 2015

Renewed upset in China

With the Shanghai comp' unable to break and hold above the big 4K threshold, the Chinese equity market is starting to unravel again. First downside target is the 3200/3000 zone.. and considering a fair number of huge one day drops since the June high of 5178, the low 3000s look viable within the next few weeks.

China, daily

China, monthly


Suffice to say.. all those recently calling a multi-month floor of 3373 should already be concerned that the SSEC has been unable to break and hold above the 4K threshold in recent days.

Despite the dozens of measure the Chinese leadership have desperately taken... the market continues to attempt to still make its way lower.

The next few months should offer a capitulation low.. and then renewed hyper upside.

Looking ahead

Wed' will see CPI (8.30am), the latest EIA oil report, and the FOMC minutes (2pm).  That will be plenty enough to keep most awake!.

Eyes on the VIX

So.. a daily close of sp'2096.. with VIX in the upper 13s. A few more days of moderate chop look probable.


Yours truly (being somewhat impatient last Wednesday).. remains long VIX from the 14s. I think the mid/upper teens are a given by end month... and frankly.. that will suffice for my next exit. On any fair basis, VIX 20s look likely in Sept', but how high might the VIX spike... difficult to say.

Goodnight from London