The collision of global markets and social mood

Wednesday, September 23, 2015

Wednesday -- Shanghai, TRIN, B, ABC

S&P E-mini Futures:
Moderately higher, but showing some fade.

Caixin Chinese flash manufacturing PMI (47.0 vs Exp. 47.5) fell to its lowest level since March 2009. Asia was down hard last night, while Europe solidly green today.

I am starting to consider that China's decline, while vicious, may turn out to be a three-wave correction. It will take months to confirm however.

Specifically, it could be confirmed by getting above 4123.923 on the Shanghai Composite -- the July 23rd highs. Above that, without further new lows, could be very bullish long term.

As a proxy, even though it's an ETF, the FXI traces out some nice Fib levels. Again, it could take months or even a year or two to confirm. And the price of the Shanghai Composite is what matters. Like any ETF, the market could care less what the FXI does. It's a derivative.

AUD weak on China print, while CAD stronger. GBP & JPY weaker today.

Weird chart patterns persist. Confusion reigns.

WTI crude gaining but has not broken out yet . . . tic, tic, tic.

Nor has NG broken down.

Gold and silver listless. Copper up 1%.

S&P Outlook:
TRIN spiked to 4.44 yesterday, another sharp probe into extreme fear levels. Not ruling out further lows, but with the cash S&P edging closer to the 1920-1925 area with fear exploding coincidently, it's an encouraging sign of a possible near-term bottom, especially if you think, as I do, that we haven't seen the highs of the rally yet.

Still thinking this whole mess from 1867.01 is a B-wave. Still thinking the whole mess from 2134.72 is an ABC correction. The market would have a stunning amount of work to do to appear otherwise.

Speaking of ABC, with every day here in the Caribbean looking like an 80s summer daydream, who could resist.

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