Monday, January 16, 2017

SSEC Shanghai Index Daily Chart; Testing 200-Day MA

The Beijing communists have been defending the 2800-3000 level in the Shanghai Index for the last two years. The PBOC stands ready to supply a money pump to keep the SSEC's head above water. The central bankers are the market. Price came down today to tease the 200-day MA at 3038, and bounced. That's the PBOC stepping in to defend the support level. Note that all of today's loss is completely recovered. The Chinese keep burning through their reserves to keep their garbage stocks floating and to control the yuan (renminbi) currency.

The 20-week MA is 3119 and price must immediately regain this level as the first priority. The  longer price stays under 3119, the heavier the tape will become.The 50-week MA is 3002. The 200-week MA is 2804.

The communists will want to keep defending the 2800-3000 area since confidence will be lost if price moves lower. China's economy is fragile now with the ongoing property bubble in play and if confidence in the PBOC is lost, all is lost. The 200-day MA at 3038 serves as an early warning indicator. Note that juicy gap (blue circle) that will need filled at some point forward.

The ADX stumbles sideways at 27-ish, call it a trendless market. Price is attempting to develop a downtrend for price but the communists will keep supporting stocks and prevent a strong down trend from occurring. Just like in Western nations where the central bankers print money to pump the stock market higher and reward the wealthy year after year.

The lower low in price occurs with the indicators not printing lower lows (positive divergence) so the Chi-com's should have an easier hand at keeping price elevated. The lower band at 3082 is violated so the middle band at 3128 is in play. The SSEC should bump along sideways especially with the communists hiding behind the curtain pulling levers to keep stocks buoyant. The global markets are a circus these days. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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