Learn Elliott Wave
Learn Elliott Wave
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China's Stock Market is Like Ours - Only More so
The various stock markets in the United States peaked in October 2007. In all probability, this was a major top, the endpoint of a "B" wave in Elliott Wave parlance, following which we can expect a long-drawn-out "C" wave down which will retrace all of the gains which have been made since 1995. This is an unhappy prospect, but we need to plan for it. In other words, we will be in a declining major trend for some years to come.
The Chinese stock market likewise peaked in October 2007. The major difference is that the Chinese market has lost about half of its value since that time. Millions of people who invested their life savings in the stock market as first-time investors had been caught up in the mania which led to the peak, and now found that the nirvana which they hoped to find has disappeared in a matter of months. There is much criticism of the market system; cisillusionment abounds; and the political leadership recognizes the situation as a societal threat as well as a threat to its own survival as a monopolistic authority.
Looking back, we see that the market peak in the United States, and the ensuing price decline, was predictable by studying the stock and Index price patterns at that time. Indeed, the formations in the Japanese Candlesticks price displays predicted that the American markets would suffer a substantial decline. Now we see, in retrospect, that much the same patterns appeared in the Chinese stock Indexes. Those who were aware were able to get out in time and save their financial skins.
What is it about the Candlesticks that make them such accurate foretellers of the future? Well, there is nothing mysterious about it. The Candle patterns simply, but accurately, reveal the psychology of the market players at any tiven time. They are not voodoo. It is interesting that many of the same patterns appeared in the American and in the Chinese markets at about the same time. They are not difficult to learn, and the time devoted to learning the dozen or so major patterns is time well spent.
The Candlesticks are hardly new. They were invented for use in the rice trade in Japan centuries ago. One trader at that time enjoyed remarkable success by using them, believing as he did that they gave him an understanding of the psychology of the traders with whom he competed. Their use in our country has only begun to be widespread within the last 25 years or so. Even now, many of the major writers have yet to come to an understanding of their significance; but the trend is surely running in the direction which tells us that one day the Candles will be universally utilized.
Just as in American, observation of the Candles at work in October 2007 did not stop there. It is an ongoing study; and we see now that the first major downstroke in the Chinese markets may have ended and that there may now be a period of price recovery. However, it is too late for those who leaped blindly into stocks, often as a matter of first impression. The markets everywhere are not forgiving.
It will be interesting to see whether there is to be a cultural interplay between the ordinary man's losses in the Chinese stock market and the reaction on the street in China to protests in the West about what is seen in the free countries as Chinese oppression of the Tibetan people. Money losses often focus peoples' attention on other matters - some object of blame is likely to be sought out. We understand that, within China, a degree of nationalistic sentiment has been whipped up by Beijing, whereby the Dalai Lama is reviled as the instigator of the "revolt of the monks" in Tibet. Part of that may be an attempt to divert the Chinese people's attention to the facts of the monks' revolt while at the same time attempting to focus the attention of the entire world on the major show-and-tell performance which will shortly be unveiled in the form of the Olympic Games. But repression of the Tibetan people will onlu bring more determination on their part to obtain a greater degree of freedom.
About the Author
Publishes investment advisory newsletter at http://www.candlewave.com/ Passed NASD Series 65 Investment Adviser exam. Creator of "Candelaabra" technical analysis system. Ret. atty and corporate EVP.
does anyone know where I can get training to learn how to use the Elliott Wave theory. I trade Forex and want?
learn how to use the Elliot Wave in my charts.
Start here
http://en.wikipedia.org/wiki/Elliott_wave_principle
Elliott Wave Forex Trading: It's Not The News That Matters
