US vs China: Is there a leader?

While there're a million views out there on this topic about global leadership, we will stick to the study of some charts. Interestingly,a handful of analysts have pointed out that the Shanghai Stock Exchange, SSEC seems to be leading other world markets. For evidence, take a look at the comparative chart below. Notice that the SSEC(blue) bottomed about 4months ahead of the SPX(red), and also topped about 5 months ahead. Notice that both uptrends were in 5 waves each, with the SPX uptrend more choppy(corrective look) than the SSEC.



Now, lets take it a step further. Take a look at the individual charts below. Notice the similarity in the form of the decline highlighted by the circle. Both were sudden and sharp, and both had a exaggerated "fourth" wave bump.





Now how can we project the above into the future for the S&P500? After a bit more selling, are we about to see a A-B-C rebound just like the SSEC, to test the highs? It's a very interesting prospect!

How do we trade this

Going long now does not make much sense, coz this could also be the start of a deadly Wave 3 down! Personally, i prefer the safety of cash & a few short positions at this point. Any move up is likely slower than a move down. No further action until the downtrendline is broken convincingly.