The SSEC attempted to break outside the pale green trend channel as trading tensions between China and the U.S. hit the wires. Chinese equities are likely to resume their path to the downside next trading week and there is much room to the downside within the green multi-year trend.
The pattern is at a critical junction. It counts either as a 3rd of 3rd or will do so after another down-up sequence. Strong selling into next week confirms a breakout failure. The trading tensions are likely to persist in a classical tit-for-tat manner. Meanwhile, an increasing number of large economies face headwinds and record decreasing growth. China is in the middle of that storm, being directly affected by U.S. tariffs and indirectly as a major exporter.
Eventually, the Chinese government is likely to interfere and stabilize the economy and its equity market. However, the macro picture paints a bearish outlook until then. Another sharp leg of minor degree is likely to unfold to the downside.
The pattern is at a critical junction. It counts either as a 3rd of 3rd or will do so after another down-up sequence. Strong selling into next week confirms a breakout failure. The trading tensions are likely to persist in a classical tit-for-tat manner. Meanwhile, an increasing number of large economies face headwinds and record decreasing growth. China is in the middle of that storm, being directly affected by U.S. tariffs and indirectly as a major exporter.
Eventually, the Chinese government is likely to interfere and stabilize the economy and its equity market. However, the macro picture paints a bearish outlook until then. Another sharp leg of minor degree is likely to unfold to the downside.