Shabby Dow Jones VS Awakening Shanghai Composite Index

By: Bulls Eye

Shabby Dow Jones VS Awakening Shanghai Composite Index

Have you taken my advice on the 20^th December 2012 (2013…. Is it good or bad?)? Still remember when I suggest readers to let go their shares which has given them profit? Okay, today do let me elaborate more on the Dow Jones weekly chart in order to give you a clearer picture on what I’ve analyzed.

Most of the traders who rely on technical analysis would understand the basis of Elliott Wave Theory. According to this theory, the wave counts starts from number 1 till 5, then an adverse direction will occur which starts from A to C

If we were to apply this theory in Dow Jones (which I always do), we can clearly see from year 2010 till now (2012), the cycle has gone through and now it is in wave number 5 or even has the possibility that we are entering the adverse direction of A,B & C.

Regardless of which position we are at, we can clearly see that investors or fund managers are not putting too much of confidence towards US Markets. As such the possibility of having a bleak 2013 for US and Malaysia markets would be very high. With this kind of probability, my advice is to stay “on the fence” or NOT to emerge into shares and equities too much. Perhaps you may change your investment direction to FOREX or FUTURES due to the possibility of strengthening US Dollars? (Please refer to Forexter for advise).

Although US don’t seem to look that promising for 2013, there is another uprising superpower country which perhaps we could pay attention to…. which is CHINA. Let us recall Shanghai Composite Index’s (SCI) history… SCI has fallen deeply from 6000 +/- to the lowest of 1900 +/-, if we were to match with Dow Jones and SCI, we may see there is a “Mirror” effect between them. As such, one part of the world seems to be bleak; perhaps there would be another part of the world that could be promising.

Let’s analyze SCI technically; SCI has contributed a sudden Breakthrough (see the red circle) which has a high possibility of a “new trend” may appear which promises bullish effect for a certain period of time. For a short period of time, SCI seems to be very “Strong” and there is a high possibility that it may be trying to reach the resistance level of approximately 2400 to 2470 .

In conclusion, I would advice traders to actually “Look East” as there might be opportunities which can hedge the “lost opportunities” which may happen in US and Malaysia next year.

Disclaimer: The information and analysis mentioned above are solely based on Invest ACE’s personal technical analysis with the aid of professional training, decades of experience and meticulous foresight; Invest ACE shall NOT be held liable for any losses (financially or otherwise) incurred by any parties relying on aforementioned analysis without prior professional consultation. Should you wish to find out more on how to invest wisely, do not hesitate to contact Invest ACE via investace126@gmail.com.