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Stop the Presses: Why We Just Published a Special Report on China
EWI’s Asian-Pacific Financial Forecast’s 5-page report on China says it's likely that a multi-year move “lies directly ahead.”

By Nico Isaac
Fri, 07 Sep 2012 15:00:00 ET
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The earthquakes that shook southwest China on Friday, Sept. 7, killing more than 60 people and damaging 20,000 houses, sadly seem to mirror the string of financial temblors that have sent shockwaves through China’s economy over the past 5 years. To wit:

  • After China’s Shanghai Composite Index soared to an all-time high above 6000 in October 2007, it plummeted nearly 65% to a 2-year nadir in 2008 -- and it's been crawling sideways ever since.
  • Along with this sharp reversal in stocks came equal blows to China’s GDP, employment figures, home sales, and every available measure of economic growth.
Today, the mainstream financial experts are ready to call it: They say that the once-soaring economic supernova of China has become a “Falling Star” (Barron's July 2012 cover headline) whose formerly bright beacon of global economic leadership is now permanently blown out.
The question is, are they right?
To answer that, let's go back to one month before the Shanghai Composite Index reached its 2007 summit, when EWI’s Global Market Perspective sent out an alert to China’s downside potential:
“The only bubble that continues to expand is that in the Chinese stock market. The following statistic suggests strongly, however, that its peak cannot be far off.”  -- GMP, September 2007
Five years later, the same Elliott wave clarity and abundance of supportive technical evidence that enabled our analysts to anticipate the bursting of China’s bubble then -- is back in the spotlight NOW. On September 6, 2012, our Asian Pacific Financial Forecast editor Mark Galasiewski released a special, 5-page report with this starting point: the long-term Elliott wave picture in China.
Inside the exclusive, Asian-Pacific Special Report …
The Last Half-Century of China’s Stock Market: The Shanghai Composite is only 22 years old, having formed in 1990. Yet Galasiewski uses his knowledge of historical events to extrapolate an objective Elliott wave picture of the Shanghai Composite dating back to 1966. The structure of the rise fits an idealized wave pattern, one that clearly implies that a “multi-year [move] lies directly ahead.”
Technical Evidence: Figure 2 contains 3 crucial pieces of technical data --  
  • The pattern: Here, Galasiewski reveals whether the Shanghai Composite’s decline from its 2007 peak fits the profile of a correction (bullish) or an impulse (bearish).
  • Momentum: If the 2011-2012 sell-off has fallen on FASTER momentum than the 2007-8 decline, that is bearish. Here, a simple RSI reading has the results.
  • Small Caps, Big Message: Our Asian analyst presents a close-up of the ChiNext index and writes: “Small companies create the big companies of the future; thus, the Shenzhen-listed companies relative [performance] in recent months” is a strong precursor for China’s larger stock market and overall economy.
Sentiment: He also points out that sentiment in China has recently hit a record extreme by two important measures. Those are:
  • Figure 3: The Shanghai Composite vs. the Consumer Satisfaction Index since 1996
  • Figure 4: The Shanghai Composite vs. New Brokerage Accounts since 2007
The historical data shows how current levels on both charts have acted as catalysts for ONE kind of move.
Real Estate: On this topic, Galasiewski couldn’t be more direct.
“Because of the great importance of the real estate market to China’s economy, the pattern in the stock price of the nation’s largest property company, China Vanke, may tell us something about the future of Chinese stocks.”
He then submits a chart of China Vanke dating back to 1992 that reveals once and for all whether the price moves of recent years mark a “slowdown” or a “complete bust.”
Bottom line: The mountain of technical evidence suggests that the next chapter in China’s long economic story is about to begin. Be there from the very start. This urgent, 5-page Special Report on China is instantly available with a risk-free Asian-Pacific Financial Forecast service subscription.

China, India, Japan, Australia and Beyond: Ride the 2012 Trends with EWI's Asian-Pacific Financial Forecast Service 

Here's what you get during your RISK-FREE 30-day trial: 
 
1. The Asian-Pacific Financial Forecast (monthly)
Editor Mark Galasiewski's insightful and useful commentary on stocks in Japan, China, India, Australia, Singapore, Hong Kong, Taiwan, Korea and more, plus the region's financial and social trends has prompted one subscriber to write that Mark clearly has his "finger on the pulse of the local scene here."
 
2. The Asian-Pacific Short Term Update (Tue, Thu, Sun)
Timely analysis and forecasts for the major stock indexes in Japan, China, India, Australia, Singapore and Hong Kong, plus occasional updates for Taiwan, Korea and other Asian-Pacific nations. Editor and award-winning market technician Chris Carolan keeps you abreast of market moves between the monthly Asian-Pacific Financial Forecast issues, while also providing valuable commentary on debt and forex markets.
 
3. The Elliott Wave Theorist (monthly)
Trusted since 1979, Bob Prechter's straight-talking Elliott Wave Theorist is the bedrock of EWI analysis. Delightfully contrary, refreshingly logical and downright accessible, the Theorist is a must-read for every independent investor. You get thought-provoking analysis and forecasts on the intermediate- and long-term direction of the financial markets, critical trends in investor psychology plus timely in-depth research and insights you're guaranteed not to get from any other source.  
 
 
Subscribe today for just $20/month
 
 
 
 

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