Again?
Yes, the Shanghai Composite had a massive Gap Down after a two week Chinese New Year break due to the COVID-19 (SARS-CoV-2) outbreak in Wuhan, Hubei, China. Since then, week after week it made momentous recovery up to close the gap this week. While this is seemingly bullish, and is technically starting to pull the MACD bullish, I call a bluff. Here is why...
1. The system Sell signal has not been invalidated. Invalidation requires a break out of the long term trend line, with continued momentum (in the face of bearish looking Asian markets).
2. The current range expected is very large with a widening triangle
With a slight probability advantage, I call a bluff on the Shanghai Composite, to be rejected at the trend line, and close the next week or two below 2975.
Yes, the Shanghai Composite had a massive Gap Down after a two week Chinese New Year break due to the COVID-19 (SARS-CoV-2) outbreak in Wuhan, Hubei, China. Since then, week after week it made momentous recovery up to close the gap this week. While this is seemingly bullish, and is technically starting to pull the MACD bullish, I call a bluff. Here is why...
1. The system Sell signal has not been invalidated. Invalidation requires a break out of the long term trend line, with continued momentum (in the face of bearish looking Asian markets).
2. The current range expected is very large with a widening triangle
With a slight probability advantage, I call a bluff on the Shanghai Composite, to be rejected at the trend line, and close the next week or two below 2975.