Charts telling the tail of the economic future...

The first important chart to tell us, what we expect on the economic horizon in the comming months ahead is The Shanghai Composite. In early-August we saw a break-down from the big B-wave triangle, which has been building since late 2008. The target from this breakout is at 1,169.
After five weeks of consolidation we have seen a break below support, which should be the set-up to the next decline lower.
I hear it all the time China is now in the economy driver-seat, but the above chart tells us otherwise. They (the Chinese) will be hit hard once again. Globalization is very much alive and well. A lot of people tell me, that we have seen the Asian economies decouple from the Western economies. But I simply can't see. The chart tell me otherwise and I belive them more, than even the best economist.

Next chart telling me, that the economy is headed down is the CRB-Index. We saw a decline from 473.97 is mid-2008 to 200.16 in early 2009 (Wave [A]). QE1 and QE2 massive stimulus packages gave the economy some support, but we only managed to correct 61.8% of the Wave [A]. and is now seeing the correction collapsing, Wave [C] down is clearly under way.

Already in March I called for a possible top as we closed in on the 61.8% correction target see the post here http://theelliottwavesufer.blogspot.com/2011/03/crb-index-top-in-place.html

The final chart telleing me, that the economy is headed lower is the Copper chart above.

After break below the pivot point at 397.04 there was no turning back.

Copper has been a very good leading indicator telling us which way the economy will be headed within the next 3 months.

My EW-count calls for wave [C] down below the ending point of wave [A] at 124.75. If that is correct we have just entered the bening of the next perfect storm.

This is no time to take excessive risk and trying to ride the wave down will be as fast and furious as it was in 2008. So take care out there...