The Shanghai Composite Index reflects China’s controlled slow-down, edging lower with intermittent bear market rallies. The index is currently testing the descending (secondary) trendline at 2500. Penetration would offer a target of 2650 but would not indicate that the primary down-trend is over. Failure of support at 2300/2350 remains more likely and would offer a target of 2000.
* Target calculation: 2300 – ( 2600 – 2300 ) = 2000
HongKong’s Hang Seng Index is headed for a test of the (primary) descending trendline at 21000; breakout above 20000 would confirm. The primary trend remains downward, however, and respect of the trendline would suggest another test of 16000.
Japan’s Nikkei 225 Index is ranging between 8400 and 9100. Breakout would indicate future trend direction.
* Target calculation: 8400 – ( 9000 – 8400 ) = 7800
South Korea’s Seoul Composite Index continues to reflect buying pressure on 13-week Twiggs Money Flow. Follow-through above recent highs would indicate a strong bear rally, but the primary trend remains downward.
* Target calculation: 1900 + ( 1900 – 1800 ) = 2000