This one is one wild ride. What we call our initial "COVID dip" in January was an absolute crash over there, and it almost immediately recovered. But then, when the world markets crashed in February and March, the Shanghai Composite crashed again with them. Goodness. And then, much like the other markets, it formed a nice wedge off the March lows. However, instead of breaking down, some positive economic news reported sent it mooning. This has completely negated the flag.
Long-term (below) is one of the most structured mega triangles I can think of. Each of the peaks correspond to unprecedented central bank intervention when their economy showed signs of slowing. And for those who want to keep insisting that central banks can goose the markets forever and ever and ever, you can clearly see here that there are diminishing returns.
Just think of all of the stimulus the Chinese Central Bank has injected into their economy just this year alone to combat the economic slowdown from the virus. Look closely: it has only gotten us a bump off the lower channel. That should make you pause.
If they push hard enough, this could try to retest the top channel again, but I would not expect it to stay there.
Long-term (below) is one of the most structured mega triangles I can think of. Each of the peaks correspond to unprecedented central bank intervention when their economy showed signs of slowing. And for those who want to keep insisting that central banks can goose the markets forever and ever and ever, you can clearly see here that there are diminishing returns.
Just think of all of the stimulus the Chinese Central Bank has injected into their economy just this year alone to combat the economic slowdown from the virus. Look closely: it has only gotten us a bump off the lower channel. That should make you pause.
If they push hard enough, this could try to retest the top channel again, but I would not expect it to stay there.