The VIX was up early last week and by Friday closed at 17.78 which is not good because as the market was up marginally on the day the VIX dropped 7.49% on the day. Turning to China the SSE has reached the target for this rally and word out of Shanghai is they are still counting on a soft landing. When I hear politicians or media people talk about soft landings I get chills up my spine. So should you. I’d much prefer to hear them say inflation is out of control. If they said that with a rising market I’d feel so much more confident of a breakout.
Now we’ll really find out if market has more sustainability. Apple is one thing but this is the really big test we’ve been waiting on. Coming into the week China was sitting at 457dg (near 450) so if it’s going to drop, this is a good place for it. If not, then we are looking at the November high which takes it out of the median channel for the very first time. If it can get up there then the next drop might only be part of a larger trading range that could last the rest of this year. So this level for China may very well determine if we get a severe drop or just a correction.
At the end of the day, let’s concentrate on Apple. If it can’t break through here I’d look for a high in the markets within 2-3 days.
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Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.
Lucas Wave International (https://www.lucaswaveinternational.com) provides forecasts of financial markets via the Fibonacci Forecaster and other reports. The company provides coaching/seminars to teach traders around the world about this cutting edge methodology.