(Click at the picture to enlarge)The Shanghai Composit (SSEC) most likely found its wave two top with the test of 3,050.42 yesterday, and the current set-up is the perfect one for a major collapse.
The SSEC showed the way up, as it bottomed-out already in October 2008 and turned down in early August showing us, that pressure on the major indices was building. As we have seen since early August the other major indices has continued higher, making new tops, the US-dollar is at a new low and preciouse metals are making new highs. As all the markets are alignning the rsik for a surprise move in the opposit direction is growing fast.
What could trigger a top? I can spot lots of reasons, that could turn things around fast. Bullish Sentiment is approching 90%, Funds are as invested in equities as they where at the top in October 2007, most cycles are pointing down and the 2 ½ year cycle has turned down together with the 4 and 10 year cycles and will keep pointing down until October 2010. The bulls have interpeteded all key economic figures positivly no matter how bad they where, all that is needed is just a tiny spark that will ignite the current bull-run and turn it into a furiouse bear-market. At the begining the news, CNBC and Wall Street analytics will see it as a healty correction, but when they find them self trapped they all want to get out at the same time accelerating the bear-market.
nice one mate
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