A whiff of sulfur as Shanghai threatens new low

Friday 21 August 2015

The global economy is not well this afternoon as equities get flogged and Asian currencies tremble as a toxic cocktail of falling oil prices, deepening deflation, capital flight to the US and loss of competitiveness to a devaluing China hammers emerging markets.

Enter Shanghai stocks which are back to their lowest in weeks and threatening new lows at -4.6% on the day at 3497:

The symmetrical triangle that has been building for weeks has now resolved in a downside break, the 200DMA is gone and if the national team can’t praise the A-shares enough to hold above 3362 then the crash is back on in force.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.