Shanghai: The September Warning Wasn’t a JokeDown 4.5% in four weeks, the Head & Shoulders targets remain intact — and October may decide whether the bigger roadmap wakes up.
Shanghai apparently thought I was joking on September 27, when we published the warning here on Substack with the index around 3,833. Fair enough. Long-term bearish charts can sometimes look like science fiction right up until the market decides to start filming the movie. Four weeks later, SSE is roughly 4.5% lower — and, so far, it is showing remarkably little enthusiasm for stopping. We tried again on October 17 at Investing Angles, highlighting the developing Head & Shoulders structure.
Since then, the neckline has been challenged and the pattern has only become more convincing. The immediate target area remains roughly 3,390–3,160, with 3,290 sitting nicely in the middle. In other words, the dragon has not disappeared. It may simply have changed direction. The uncomfortable part is that this Head & Shoulders is not the biggest bearish structure on the chart. It is merely the first one becoming actionable. Our longer-term roadmap from September remains very much alive, but before discussing the more dramatic destinations, I would rather see how Shanghai closes October. Major monthly candles have a habit of clarifying arguments that daily charts can keep alive for weeks. For now, the message is fairly simple. The September warning is tracking, the classical pattern is developing as expected, and the index has yet to produce a convincing technical response. A bounce can happen at any time — markets rarely travel in straight lines — but a bounce and a reversal are very different creatures. Bulls need to show something much stronger than a few green candles before we start polishing the jade again. So we will give Shanghai the rest of October to make its case. If the monthly close confirms what the shorter frames are already suggesting, the Head & Shoulders targets may turn out to be only the first checkpoint. And that is where the much larger roadmap becomes considerably more interesting. Invite your friends and earn rewards
If you enjoy Investing Angles’ Substack, share it with your friends and earn rewards when they subscribe.
|
