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.

News:
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.


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

Treasuries:
Weird chart patterns persist. Confusion reigns.

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

Nor has NG broken down.

Metals:
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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