China

Maybe I am one day late to write about China :) I mentioned China indexes / ETFs several times last fall as portfolio hedges against USA longs for the simple reason that you had a pick of several emerging market index ETFs that were below all pivots, when only IWM was in similar condition in the USA. I'll write more about these soon, but for now let's take a look at China specifically. 

There is an ETF tracking Shanghai (ASHR) but due to a distribution and price adjustment we cannot use the pivots on that this year. Tradingview.com has Shanghai Class A XGY0 which appears similar to, but not exactly the same as, the Shanghai Composite. The prices are different, but the percentage moves line up exactly, so let's say good enough. Then we'll add FXI. EEM often trades in sync with China. Lastly as the Chinese currency has been in the news and a proxy for government concern about competitiveness let's take a look at that too. 

For the sake of brevity I'm sticking with the big picture weekly charts with long term pivots only (yearly and half-year). The interesting point is that all of these are above YS1s, and EEM and CNYUSD are even above 1HS1s. This is not the case with most USA indexes right now. OK, a lot of this is due to the huge drop the China related asset classes experienced in 2015 relative to USA; as the pivots are based on the high low and close, the yearly pivots are lower on these because of the larger differential between the high and low. But that was last year's move. It will be interesting to watch some of the 2015 beat up names as 2016 progresses.  

On the Shanghai, the first thing to spot is how well the long term pivots did on the buy. You had a try in early 2013 that eventually failed for a small loss; then you didn't have to even think about anything until July 2014 when it cleared both without any question and triggered a investment buy. The market went vertical and reached YR3/ 1HR3 combo which exceeded only 2 weeks, and that was the end of the rally. Rejection of 2HP in 2015 in July was a tell; then the low of the year was on the YP exact in August. But now it is below both the YP and 1HP like everything else. Due to the big drop in 2015, it has not yet tagged its YS1. So, 1HS1 broken but above YS1 at 2953. This will be a big level to watch going forward.

More quickly now, FXI: Currently below long term pivots, breaking 1HS1 at 29.94, hasn't tagged YS1 27.77 yet. 

EEM is actually above its 1HS1 28.12. If lower, then obviously YS1 26.73 next to watch. 

Lastly the CNYUSD cross. So far it is holding the 1HS1 exact as well. I don't know if pivots will work on this like other more widely traded asset classes. Also, was the currency a topic du jour or an issue going forward? Hard to say but we can keep it simple and say above the YS1 .1508 is more stable than below.