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Tuesday, July 27, 2021

Market Update 7/27/2021 - China, the Federal Reserve meeting, and a guide to calling market reversals

Monday (yesterday), we saw some panic selling in Chinese markets, and this, after months of selling, so I'm looking for a final washout there - to signal maximum bearish sentiment - followed by a classic reversal pattern. If that sounds confusing to you, think back to the peak of the panic in oil markets, around the time covid was being blamed for the crash. Once everyone was bearish, and the headlines read, oil futures trade to $0, then you saw the reversal, and that was one of the easiest calls ever made.

Calling reversals in US markets is a lot easier, because we have several $VIX charts to guide us, but charting individual sectors, such as the Chinese Technology index, should be very helpful... 

The upcoming Federal Reserve Meeting could be a catalyst for a reversal in Chinese markets, because all the big US financials (friends of the corrupt fed) are counting on China to lead global growth. It's not Puppet dictators like Joe Biden selling us out to china, it's the banksters. It's the global financiers.   

First, let's take look at the broken $FXI China chart. This index is the most charted China index of all, but we're going to look at several... Not only do I chart several alternative chart views, but also alternative indices, and individual - related stocks. Here's one to keep an eye on BIDI (the Chinese google). 

$FXI (weekly view) - you can see where support broke on this chart overnight (Sun.), and that explains the huge gap down, to a key Fibonacci target, and the lower end of the parallel channel (seen in purple). I think we'll see prices stabilize here, before we see money put to work on the first Monday of August. 

$CZH (daily candlestick view) - 270 looks like support, and where you'll want to set a stop. Res on this chart at the 348 level.  

$BIDU - do buy bidu. It looks like it's trading in an oversold wave b, just below the previous low. It's a head-fake (shakeout), in other words. If I'm right; I'd expect it to test res at the highs of 2018, before the end of the year. (275 - 285 target)

$IQ - Chinese Internet took a big hit, and all the fake institutionally owned financial news outlets we're seen reporting that yesterday. News seems to be more than priced in at this point. Watch for the sector to find support at the lower end of my channel (in black), at $11. 

As far as the rest of the market: $SPX seems to be retesting the recent highs, while the $RUT continues to trade in a sideways range. Typical boring summer trading


I don't have time to proofread this update, until later, so pardon any errors, found within... 

Take care, and good luck 

Later, AA 

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