Is this just a computer glitch? I think it's highly unlikely. Maybe it's time to pay attention to Robert Prechter of Elliott Wave International. He's been calling for a sharp and scary drop to new bear market lows for a while now. His April Elliott Wave Theorist included a very detailed timing analysis, suggesting the dreaded P3 was imminent. Lo, and behold.... black Thursday?! 1987 repeat?
This event shows why having stops in place always, is so important. Those who were positioned on the short side, congratulations! We'll find out soon if today's action was just a glitch, or the harbinger of more serious declines. I think the latter is more likely. Sentiment definitely allows it, as posted earlier along with the long term chart.
(What Prechter's been saying for months)
What does this mean for Shanghai? It is possible that Shanghai will execute a zig-zag correction instead of the triangle, which means a retest of the 2600 area. But remember, Shanghai, unlike other Asian markets is a bad follower, and has a mind of its own. I'll update during the weekend.
Meanwhile, take care folks and all the best!
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