RIDE THE PBOC !!!China returning from LNY and an (un)lucky -8% selloff taking the headlines as SHCOMP catches up to the bleeding across Global Equities since last week. Well done those that caught the move we traded live here:
A flawless -8% leg in a single gap; as long as the full extent in the impact of this virus remains unclear it will be difficult for SHCOMP to get back above 3,000. These retraces should be seen as good SHCOMP selling opportunities (although tricky in this case for some). The liquidity injection from PBOC will be enough to put the handbrake on the selloff, this area is of focus and here looking for 2983 to the topside while 2650 is the area of focus below.
China a much bigger part of global growth now; almost 2/3 of China is in shutdown meaning PMIs are likely to dip next month. We have some time to complete the retrace before reassessing if the coronavirus impact can be looked through or if we will need to change MT and LT outlooks.
A transmission leg, not for the feint of heart. Thanks as usual for keeping the support coming with your likes, comments, charts and etc! Good luck all those trading SHCOMP after the last 8% move we can afford to leave some chips on the table.
