08/17/2009: market view update on both the US and China A share

08/17/2009: market view update on both the US and China A share

Today, finally, the pullback of US market is coming.

It should go down on a straight row for at least 3 days. This week is OE week, the time to kill longs after the sharp uptrend.

I changed my view a little bit on the market: since the bull run was too sharp and before the sharp gap down open of today, it consolidated strongly on a high level too long, so I think it's kind of bull trap just as the big down to 880 in early July was a big bear trap.

If there is an uptrend higher than 1050, it should be the Xmas year end.

Some opinion on A share:

I think SH index will pull back to 2550 area before it could consolidate.

Last night, SH gapped down by 50+ points after going down on a long straight row yet volume didn't get heavier. My personal reading is in such a case the gap down is supposed to collect stop-loss orders. While the volume is not big, the market sentiment is neutral. So it is due for another round of sharp going down till firm bulls cut loss before it could go up again, no matter the later uptrend is rebounce or anothe bull run.

So far, I personally think the top 34xx should be a firm top the A share market can't touch in a long time because the downturn from it is so sharp and determined, ie, the big boys are so decisive to sell.