It's obvious we are looking at a equity bubble in China. I'm not worried where this goes, I'm more interested in where this ends. I want to be on the put side of this . I have most likely missed 2/3 of this price move. and price velocity will be much greater on the downside, and more money can be made when the bubble burst.
In this chart example I'm focused on large impulsive symmetrical moves on the downside. Both moves on the downside had similar angles. I marked these previous downward moves and added them to where Chinese FXI brokeout.
Timing the Bust
I'm expecting the bubble to top somewhere between July 13 and August 28 (noted vertical line alarms on chart).
Pattern: Bump and Run
China Bubble Burst is Collateral Damage Around the World
US Bond Market with positive drift
US Stocks with positive drift
Dollar rally/ S&P highs ->
Commodities crash (partly due to China slowdown) ->
Europe crash ->
China rally (Money coming from manufacturing/ construction have no place to invest and stock market is the only way) ->
Next few months will be very interesting, as these major trends start changing creating plenty of volatility.... stay in cash and that's opportunity! :D
My opinion is the recent crazy rally was due to China's internal reason (monatery easing, manufacturing slowing down, stalling price of real estates, and so on) rather than financial gambling overseas. Though it is crazy and sometime even insane, the government is still willing to see it and everything is in control at present.