China Stocks Nearing Multi-Month Bottom; Early-Dec. Cycle Low in Focus.
11/30/19 INSIIDE Track: “China’s Shanghai Composite remains negative… On a cycle basis, a drop into the first half of Dec. ‘19 would fulfill a ~4-month/17 – 18 week high (early-April) – low (early-Aug.) – low (early-Dec. ‘19) Cycle Progression.
It would also fulfill a higher-magnitude, but very similar (fractal-like) ~11.5-month high (mid-Jan. ‘18) – low (late-Dec. ‘18) – low (early-Dec. ‘19) Cycle Progression. So, a new round of selling could be seen in the early part of December.
Hong Kong’s Hang Seng Index is showing a little more resilience and could also set a low in the first half of Dec. In August, it plunged back to its intra-year low, retesting the bottom set in early-Jan. ‘19 while fulfilling a ~40-week high (Jan. ‘18) – low (Oct. ‘18) – low (Aug. ‘19) Cycle Progression…
Japan’s Nikkei 225 Index remains the strongest of the primary Asian Indexes and has fulfilled the outlook for a rally back to ~23,500. It is turning its monthly 21 MAC back up and could ultimately make it back above its Oct. ’18 high. (Watch April 2020 for a potential 1 – 2 year peak.)
The European STOXX 600 Index spiked above 401.0 but is expected to see some selling in Dec. with an initial downside target near 390.0/FY…
Canada’s TSX 60 Index remains one of the strongest global indexes and maintains the potential to stretch a final high into 3Q/4Q 2020 – the latest phase of a ~6-year low (Sept./Oct. ‘02) – low (Nov. ‘08) – high (Sept. ‘14) – (high; Sept. – Nov. 2020) Cycle Progression.
In the interim, the TSX 60 Index was projected to rally into the second half of November and set a new 1 – 2 month peak at that time – perpetuating a 10 – 11-week high-high-high-(high) Cycle Progression and completing rallies of similar duration. It has just fulfilled that and could see a sharp bout of selling in Dec.”
Chinese & Hong Kong stock cycles project a multi-month bottom in the first half of Dec. ’19. This dovetails with analysis for domestic stock indexes to suffer a quick, sharp sell-off in early-Dec. What then?
Where Could December Sell-off Find Support?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.