SSEC Shanghai China Weekly Chart Sideways Triangle Descending Triangle

China's bubble is popping. The two year sideways symmetrical triangle played out with a failure in May 2011, then back kiss in July 2011, then failure. 2300 is important support. Price moved lower into the green falling wedge and positive divergence that bounced it back up. Now price is back down again and the red lines show positive divergence remaining but only if price would print a lower low in the red circle. This is a quandry since if price moves any lower it will rupture the critical 2300 support which opens up lots more downside. This is called "bounce or die" time.

The market opens up in a few hours, remember this is a weekly chart so price will decide over the next few days, bouncing, or dying. The pink box for the ADX shows that the downward price action is a strong trend, hence, a strong trend means further oomph, in this case that would be to the downside. If price ruptures the 2300 support, the red lines for the indicators can turn negative as well negating the positive divergence shown, and opening the door for further selling.

The 20 week is under the 50 week which is very bearish. There is a juicy gap fill needed at 2000. The purple lines show a descending triangle now in progress with baseline across the important 2300 support. The 2300 support is the line in the sand. Projection is for failure of the 2300 support and initial target to 2000 as the weeks and months move along into 2012. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.