Much has been said about our tie-in to China. When I look a the SSE on a long term or short term basis, all's I see is bullish patterns. Particularly today's.
Sadly, I don't have the sort of charting software others seem to have splashed out on. Maybe I'll amend that in time. Maybe not. In the meantime, what I see on the SSE is a 70% correction from the Oct 07 high to the Nov 08 low.
This was followed by a late-July 09 peak which counts, to me, as five up, followed by a classic three wave move down to the late-June 10 low. Of great interest is the retracement percentage from July 09 to June 10. It is pretty much 60.5% of the move up from the crash low in 08.
If the 08 low marked the bottom of the bear's rampaging crash, which I reckon, along with Standard Chartered's Gerard Lyons in his Super-Cycle report, then we're looking at five up for the new bull with the recent Fibb (near-enough to) .618 wave three down.
Common wave 2 retracements, particularly after such a bottom as in 08, are 61.8% retracements. What about market sentiment - market psychology if you like, in the 'classic' wave 2 down after a major trend change from a big old angry bear?
Shattering is a word, and shattering is what we've seen and perhaps still got in the minds of too many right now.
But the bottom is in.
Where did the market go from the July 10 low? In pretty much the same way it did from the October 08 low, which is to extend the fifth wave in a blow off. Amazing symmetry is what we all seem to see. My perspective is bullish, and credit to Hedge Job for stating his case. Mine isn't necessarily right, though I do want to write about it as it appears fairly clear to me.
Don't fight the Fed.
So the July 10 to Nov 10 pattern is five up, and we've bottomed 25 Jan 2011 after three waves down (zigzag) which retraced .618 (near-enough at .605) to the fourth of lesser degree. Patterns...these are the patterns I see, and they are not bearish. Decidedly not bearish; on the contrary, it is all very, very bullish. And today saw a very clear bounce of five-up from what I am calling as the 25 Jan 2011 low.
We are in a bull market, and I'm buying the resource sector on that basis. I am not leveraged, but the XJO thread has my interest.
(20min delay)