China’s Stock Market 8.5% Crash: Where Was the Precise Turning Point?

Last week, I posted this chart in the “Synapse Network” private forum, which flagged out as a bearish SHORT signal.

sse 270715 shanghai stock exchange synapse network

sse 270715 shanghai stock exchange

Today, the market responded with a resounding -8.5% crash in the Shanghai Stock Exchange.

Monday’s plunge was all the more surprising because it followed a government rescue package that had helped drive a 16 percent rally since July 8. That support appeared to vanish without warning, leaving analysts guessing whether authorities shifted their policy stance or just got overwhelmed by a flood of sell orders. Whatever the answer, foreign money managers didn’t stick around to find out: they sold holdings of Shanghai shares for the 13th time in 16 days.

Investors “are concerned and lost,” said Alex Wong, a Hong Kong-based asset-management director at Ample Capital Ltd., which oversees about $155 million. “China’s market is distorted, so you can’t sell short very confidently and you can’t buy up very confidently either.” – Bloomberg

Note to self: Sometimes, all it takes are a few simple tools to identify good trades and precision turning points.

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About the author

Spencer Li is a trader, investor and entrepreneur who currently manages his own portfolio of stocks, REITs, currencies, cryptocurrencies, properties, and businesses. As a former professional in private equity and proprietary funds, he has over 10 years of market experience, and has been featured on more than 20 occasions in the media. As an international speaker and avid globetrotter, he has travelled to over 50 countries to spread his knowledge.

 

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