BLAMING IT ON SHANGHAI

There is a lot of news coming from Shanghai these days. This is not the first time Shanghai is in news, the Chinese composite fell 10% in a day and made global headlines. It was believed to have caused a mini crash worldwide. Chinese markets also made to the top list of queries raised by Orpheus members recently.
“What’s happening to China? Why is it crashing?”
The question is not why it is crashing, but the question is why is it so volatile? We as humans don’t really understand volatility. Positive volatility is considered growth while negative volatility is called as a crash. Chinese market still lacks the critical mass compared to some other regional block countries like India. Chinese GDP to market capitalization is still below global average. Above this SHANGHAI market also has a less trading history compared to India, which has more than 125 years behind it. These are just a few reasons why Shanghai is more volatile or gets noticed. Larger down volatilities make more news.
We have also talked about performance cycles between India and China (The performance cycle – econohistory.com) which refutes idea of secular performance. Performance like other assets are cyclical at all degrees and this means the SSEC fall is happening as anticipated. This is contrary to popular belief which on many occasions mention “who new markets will crash?”
WAVES.GLOBAL mentioned the Chinese topping and the down leg over the last few reports. The overall global indices remain weak and negative. SEP should see further volatility.
Enjoy the latest WAVES.GLOBAL
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ORPHEUS GLOBAL RESEARCH
WAVES.GLOBAL is a perspective product published on Monday. The report highlights top GLOBAL indices and emerging market indices viz. Dow Jones Industrial (.DJI), S&P 500 (.GSPC), German DAX (.GDAXI), Russian IRTS (.IRTS), Shanghai Composite (.SSEC), Nikkei 225 (.N225), Brazil BOVESPA (.BVSP), Indian Sensex (.BSESN). The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers and market trends.
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