HSCEI trade ideas
HSCE Long: Expecting Similar Price BehaviourI would have loved to count the Elliott Waves for this. However, the wave is not clear to me. As such, I used other techniques to project how this instrument will move.
Following are the methods I used:
1. Supports and Resistances
2. Trendlines
3. Fractals
4. Fibonacci Time Counting
The main reason why waves are difficult for me is because of the wave (Y) that is shown in the chart. Honestly, I do not like the way the price moves. The move up is not "clean" in the sense that there are too many overlaps in the corrections. The first 2/3 of the (Y) move seems to be struggling before a run-off that looks more like exhaustion run in hindsight.
Here's a few things to note in the chart:
1. Wave (Y) ends at a very close price to Wave (X).
2. The immediate correction after wave (Y) made its high goes on for 13 weeks.
2.1. The current correction runs for 21+1 weeks.
Outside of these price and time relationships, we know that at the macro level, what is happening now is the global trade war that Trump has started, causing many instruments to fall sharply. We know that China has actively retaliate to his actions. This is an upheaval in global trade status quo. But will these caused fundamental shifts in economic activities?
Firstly, we know from economics that taxes are economic inefficiencies and that means that in some ways or others, something will come in a fill these inefficiencies.
Secondly, we want to question if the trade war will cause a crisis. For a crisis to happen, there must be lack of liquidity in something. Right now, there isn't. Not that I can see anyway.
Thus, I believe that the financial markets are just experiencing a panic selloff. Note that this is inline with my previous assessments that the US markets are in the 4th wave of a super cycle move. Maybe China is a different beast. But we'll see...
