Tuesday, 12 May 2015

China headed for 5K

Whilst US equities started the weak moderately weak, the China market has resumed normal service, after interest rates were lowered for the third time this year. The Shanghai comp' has a viable floor of 4099, and is already back to 4333. Continued upside to the giant 5K threshold looks very probable.

China, daily

China, monthly


*I continue to think it is useful to keep in mind many of the non-US markets, as everything is connected of course.

So... a second consecutive daily gain for the SSEC, and there will be clarity on any daily close >4572.

Considering the recent rate of gains, 5K looks viable by late June.

From there.. a natural retrace back to the multi-year breakout zone of 3500 looks probable... and yes.. that is a VERY powerful 30% lower.

Looking ahead

Tuesday will only see US Treasury budget data.

*Fed official Williams (the T-shirt guy), will be talking in the lunch hour, and Mr Market will again be listening for any talk of int. rates or equity valuations.

Goodnight from London