I was asked if I’d post the Fibonacci retracement levels on the Shanghai Stock Exchange by one of my readers. Hope you find this useful Mark.
Where we’ve been: As you can see after a brutal slide the rally off the October lows doesnt’ seem so impressive after all. I’m not taking anything away from the Chinese markets, but we’ve only just peeked our nose past the 38.2% level only to be rejected. When you put in in perspective like this, we really had to expect some type of knee jerk reaction.
Where we’re going: While it’s impossible to say for sure how far we’ll correct, after falling through the 50 moving average (blue arrow) you can see that a 250 point drop down to it’s first retracement level seems reasonable. That would be the minimum correction for this downturn that would satisfy most technicians need for a move lower.
