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Short

China Stock Market Poised for Another 25-30% Decline

INDEX:XGY0   Shanghai Class A Idx
166 5 3
Shanghai "A" Shares index appears to be declining from the mid-2015 high in a zigzag 5-3-5 correction. The current wave B appears to be ending as a triangle which, whether complete or not, is shaping up within parameters that would yield a downward thrust measurement for wave C equivalent to between 28.4 to 32.4% from the present level. Coincidentally, the level of the 78.6% retracement of the rally from June 2013-June 2015 falls right in the middle of that range, near 2670.00.

Should the index exceed 3848.00 before then, I will reconsider this count.
Nice work! what level do you think it will go up to now?
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ac7777 plzcarryme
Thank you. Well, I won't yet rule out at least a bit more of a decline. Perhaps to the 2670 area. As far as how high it would rally after it hits this bottom, I find it really hard to say. Frankly, the whole Shanghai A Shares price history looks to me like one massive bearish contracting triangle. Back up to the 3,800s would not surprise me, for a 38.2% retracement of the decline from the 5,400s, but I really need to see what kind of pattern the next rally forms to have a clearer idea.
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snapshot

This is the bearish contracting triangle view, suggesting that wave D down is nearing completion and should be followed by final wave E up. The internals of the waves so far seem to support this view, in my opinion. This implies that all upward progress in this index has actually been a countertrend correction. Although stock markets are generally meant to rise from their inception, I can see how one might be destined to fail within an economic system which was not designed to allow for it.
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Great analysis. I'm hoping for it to bounce back above 3000 at least, Thank you very much! :D
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The index has dropped into the previously indicated target area. According to Marketwatch.com charts, it has reached 2761 today. Although the decline of the 'C' wave may not yet be complete, I expect it will soon bounce.
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