Latest Indiacharts - The Truth About The Markets

Published: Mon, 06/22/20

The Truth About The Markets

The China India Spat

It is now over a week old and this is not the first outbreak of border rage. That is best how I will describe it. The media just wants to go out and call it war on China as if that is the solution and even a viable one.

The question for market participants is whether to take this news seriously. The market itself tells us at times how to react. The chart of the Shanghai index discussed at Indiacharts below reveals that China is not worried about a war. In India we have been through a 2 year bear market in stocks in general and at the end of such a decline negative social mood and its effects in society's reactions can be witnessed in events like this.

Longer term both countries are part of the global economy and disruptions do not help anybody. I can hear the cheer about abandoning Chinese goods but if you are going to be part of the global supply chains and produce for the world that is not an option. Going backwards would only take us back 20 years.

How about coming up with a plan to produce cheaper and better products locally. That is how you compete and beat your neighbors at their own game. Our failure to do so in the post reform era makes those calls for reform baseless then. Wake up the Indian Entrepreneurial spirit.

In the meantime markets are moving from negative mood toward positive mood and this too shall pass

Rohit Srivastava

Gold

Gold MCX took support on the 20 day moving average at 46,770 and the move beyond the recent high of 47,680 would amount to a higher high higher low pattern which in classical Dow theory is the definition of an uptrend. Once wave 5 up starts it should continue to the top end of a broader channel for the previous 3rd wave that started in March.

gold 170620

Shanghai Composite

China is in early stages of a wave 3 recovery. My long term count has not changed in 2 years, that wave 2 down was forming, it just took longer as trade tensions and the pandemic blew over. Prices just remained in wave 2 in a deep retracement but did not fall to new lows. now in early stages of wave 3 the move up should accelerate.

shanghai 190620

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Rohit Srivastava
www.indiacharts.com
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