Published November 11th, 2018

The brown channel depicts wave action throughout 2018. It counts as a 5 wave impulse to the downside. The Elliott wave pattern is most likely complete as it stands right now. An impulse to the upside unfolded from the mid-October low. That was the first but very important piece of confirmation regarding our case that the brown trend is complete.

The spike to the upside is probably the first part of a countertrend correction. Chinese stocks are likely to show some form of follow-through to the upside. Our base case is some form of complex sideways action before we see the final part of the correction. All in all, we expect to see form form of violation of the brown trend channel. The countertrend bounce is likely to target the 2,800-2,900 area before fading.

The analysis above is a historical abstract of our Shanghai Composite Premium Analysis. Subscribers can access multiple timeframes, which are not displayed on this page.