Elliott Wave Analysis of Shanghai SE Composite Index Nov 2011

It is three months since I presented some Elliott Wave Analysis of the Shanghai SE Composite Index.. There are several requests for an update and so here are the relevant charts with Elliott Wave comments.

You should compare the first chart with my last update of July 18th. The wave counts are completely different, but we got the direction correct. What was the deciding factor for my bearishnes at that time? It was the personality of the move from the red colored C. Remember that you DON’T have to be worried about your wave count to make money. The count is never a fixed thing. Just follow the rules and guidelines governing the theory (and if you wish, the many tips in my book, Five Waves to Financial Freedom, and you should be able to trade with confidence


  • I agree with your Shanghai Nov11 chart. I think that the recent rise in stock prices were a deviation from the a bull market that started in July-August.

  • alex

    hi Ramki. i have some question to ask you , wave four price within the limits of wave one price,is it accord with wave rules,
    the technical analysis show me i should buy ,but i don’t see fundamental plane support the china stock arise higher, i am very suffering, i am now short position since april.

    • Hi Alex, I am sorry to hear you are suffering with some bad trades. If Wave four comes into the territory of wave 1 during an IMPULSE phase, that violates one of the rules, and you would assume that we are only in a correction. Regarding your other comment, where the fundamentals and technicals appear to show you different paths, there is no single answer. If you are trading with the help of charts, you should know where to have a stop loss.

  • prithvi

    Dear Ramki,
    As per your instruction for drawn your attention about crude price,
    Now the price comes @94,Now Please update ur post for that.
    and please update about about dow.

  • Yan

    My Teacher, The Chinese Index has just broken 2200 mark yesterday. obviously my bullish wave count was incorrect. the chart looks horrible now, how much lower do you think it will go please. I am in cash atm, so I am not nervous.

    Many Thanks

  • Steve Osborne

    Correction from my Oct. 31 post above:
    I meant “the bear market that started in July-August” (otherwise my post doesn’t make sense). Since then (since Oct 31st), the market went up with good technicals; then went down during a barrage of events such as the Supercommittee’s deadline; and back up up after that. In November, markets tested the 11500 bar defining the level above which we have a bull market and below which we have a bear market. Last week, markets revisited the 12200 resistance level and retreated in what could be a step back to jump higher.

  • Yan

    Sir, I think I might have answered my own question again.

    this is the revised wave count on the weekly time frame. it is a extended 3rd wave, and the 3rd wave will end at 2060–2075. (2.618 of wave 1), then retrace 23.6% of wave 3 make a new low afterwards, because the 2nd wave was deep and irregular, hence the 4th wave should be shallow?


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