SSSE - Shanghai Composite -The China Will Help Russia?
Updated
This Chart Suggests That China Will Help Russia
A negative mood in China could be reaching an extreme.
Reports over the weekend are stating that Russia has asked China for military and economic assistance as its invasion of Ukraine gets bogged down. A new Sino-Russia friendship pact was formed just before Russia launched its assault, with Putin and Xi Jinping best of buddies at the Winter Olympics. With Western sanctions impacting the Russian economy, it’s abundantly clear that China is now the key in this geo-political crisis. China has a choice of whether to help Russia, by buying its oil, etc... or to put pressure on Putin to stop his imperialistic ambitions. The chart above is a clue that China will choose the former route.
The chart shows the progression of negative social mood in China since 2007, with that mood trend driving a bear market in the Shanghai Composite index. The pattern is a triangle, very similar to that seen in the Russian RTS$ index which caused to forecast that Russia would invade Ukraine.
Primary degree wave (C) of the triangle equaled 0.618 of the length of wave (A), a solid clue that the pattern is correct. The advance in wave (D) might still be operation but it’s interesting that, although not a classic triangle ratio, the proposed wave (D) ending in September 2021 equaled a Phi-related 0.382 of the length of wave (B).
So, if this wave count is correct in the Shanghai Composite index, Primary degree wave (E) is already in operation. Negative mood expressions such as widespread Covid-lockdowns could already be a manifestation of this wave, which can be expected to be the point at which negative mood reaches an extreme. (Note that regardless of whether the Shanghai Composite is already in wave E or still in the latter throes of wave (D), in either case the larger degree bear market is 15 years old and counting.)
The negative mood extreme could very probably drive China to go all-in in siding with Russia. Crisis and opportunity indeed.
A negative mood in China could be reaching an extreme.
Reports over the weekend are stating that Russia has asked China for military and economic assistance as its invasion of Ukraine gets bogged down. A new Sino-Russia friendship pact was formed just before Russia launched its assault, with Putin and Xi Jinping best of buddies at the Winter Olympics. With Western sanctions impacting the Russian economy, it’s abundantly clear that China is now the key in this geo-political crisis. China has a choice of whether to help Russia, by buying its oil, etc... or to put pressure on Putin to stop his imperialistic ambitions. The chart above is a clue that China will choose the former route.
The chart shows the progression of negative social mood in China since 2007, with that mood trend driving a bear market in the Shanghai Composite index. The pattern is a triangle, very similar to that seen in the Russian RTS$ index which caused to forecast that Russia would invade Ukraine.
Primary degree wave (C) of the triangle equaled 0.618 of the length of wave (A), a solid clue that the pattern is correct. The advance in wave (D) might still be operation but it’s interesting that, although not a classic triangle ratio, the proposed wave (D) ending in September 2021 equaled a Phi-related 0.382 of the length of wave (B).
So, if this wave count is correct in the Shanghai Composite index, Primary degree wave (E) is already in operation. Negative mood expressions such as widespread Covid-lockdowns could already be a manifestation of this wave, which can be expected to be the point at which negative mood reaches an extreme. (Note that regardless of whether the Shanghai Composite is already in wave E or still in the latter throes of wave (D), in either case the larger degree bear market is 15 years old and counting.)
The negative mood extreme could very probably drive China to go all-in in siding with Russia. Crisis and opportunity indeed.
Note
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