Just a quick note that due to “technical issues” the NYSE floor has been halted for about an hour. (Small trades still proceeding electronically).
Also, over the last few weeks, China has been dropping. As of last night, they had 1300 individual stocks halted as the China Government tries to figure out how to keep a balloon inflated when it’s been holed… They have banned short selling for a while too. The problem being that a “double in a year” is not sustainable and will collapse… so “good luck with that”.
This chart compares the SHANGHAI index ticker to the HANGSENG index ticker and the SPY exchange traded ETF for the S&P 500. You can see that the HANGSENG had a bit of a bubble, but the SHANGHAI was what really went parabolic. ANY TIME there is a generally flat market or ticker and it goes to a parabolic doubling behaviour, expect an eventual collapse of the bubble. Often after a double or about a year, but sometimes faster or after going further. It’s that near vertical rise and volume spike that calls the ball in it.
This graph has PSAR (Parabolic Stop and Reversal IIRC) as those little red dots near price. When price crosses those dots, you swap your position from long to short, or short to long. I.e. it says to sell when price crosses to the downside, and when to buy back in.
Similarly, Volume+ goes strongly red as the crash forms. MACD goes “red on top of blue” while the MACD Histogram (the black bit mid graph) has black below the zero line. All saying “get out or put a stop loss order in place”. Where MACD crossed zero it’s “bear market rules”, but one ought to have been out or stop loss order set at the MACD crossover.
Looking at DMI, Black is very strong (high market momentum) with blue on top throughout the run up / bubble phase. When blue and red converge it is saying “step out for a small correction” (the black top inflection calls close to the local top) and when red clearly crosses blue and stays there, the run is over. At this point “strength” is increasing as the black line rises, it is NOT yet inflected so more downside to come, and with strong “red on top”.
Clearly the different China markets are behaving somewhat differently, but this is in part because the China government only lets some folks trade in limited markets. They are attempting to manage the market, and that usually ends badly.
For now, though, just realize that global markets are disrupted and it’s best NOT to try selling anything right now (and certainly not buying…)