(Video) Fight of the Century: Keynes vs Hayek

Part 1

Part 2

Shanghai Composite: On Life Support

"Charging Defibrillator - Stand Clear. One, two, three... Clear!" Shanghai Composite has gone critical in the past few weeks, approaching the bottom trendline of the very large triangle illustrated in older posts. This uptrendline coupled with the 2650-2700 zone might very well be the Life Support it needs. Looking for a rebound here back into the safe zone upto around 2830, and possibly the upper trendline later. An eventual break either way out of this triangle, will be the difference between a rehabilitation or a coma. Like a good doctor, continue to monitor the vital signs - price action, volume, oscillators and trendlines.



SENSEX: Reaching Support Zone

Bombay SENSEX is reaching oversold levels on the daily, while approaching the support zone between 17400-17800. Expect to see some kind of rebound here in the short-term. It is too early to call an end to the correction here. Further updates will be posted as the chart develops.

Hang Seng Index: Trendline Watch

HSI has stayed in range since the last post, in which a possible breakout was suggested. Respecting 24500 to the upside, while drawing support from 22400. Hence a nice trade will be in play once it breaks either side of this range. In the very short-term, HSI is oversold on the daily with a slight divergence, suggesting a rebound rally of sorts(which has already begun.) Also of interest is the lack of volumes on the recent decline.

S&P500 Failed IHS & Downtrend Channel

Not long after the last post, SPX broke below the proposed 'neckline', and hence invalidated the Inverse Head & Shoulders.This is a bearish development. The only consolation for the bulls is that the downtrend remains in a Corrective channel, and has not yet developed Impulsive characteristics. In the last few sessions, a positive divergence developed on the hourly, resulting in a relief rally.

The good news for the bears is in the chart below. The recent declines also broke the uptrendline of the rising channel (blue).

Can you count 5 waves up from Jul-10? As outlined in an earlier post on the DJ World Index, are we staring at an end of this uptrend? For a downtrend to take root, selling activity needs to pick up pace right here with better volumes.

For the moment, short-term upside is capped around 1330. A continuation of the uptrend requires a break above the downtrend channel.