That one common sentence that appeared be it from US President, Analysts, Economists or even common people from Singapore. Frankly speaking, no one win in a trade war when global economy is linked from one country to another. Never believe in those word so decided to look at stock market for both China and US from Elliott Wave perspective in Supercycle degree. After all, the trend (be it up or down) in a Supercycle takes multi-decades to establish and not just a trade war which happened just early this year could change the shape of it.
The above is the S&P500 chart taken from Yahoo Finance and it ranges from 1950 till present. The period from 1950 till 2000 is Supercycle degree Wave ((1)). From 2000 to 2009 is the Supercycle degree Wave ((2)) correction in a Cycle degree (A)-(B)-(C) pattern. From 2009 till now is the Supercycle Wave ((3)) and still on going. The Cycle degree Wave (1), (2), (3) (Wave 1, 2, 3, 4, 5 is the Primary degree) and (4) have completed and S&P500 is in Cycle degree Wave (5), the last stretch for Supercycle degree Wave ((3)). Just as a guideline, Fibonacci Ratio was used to validate the wave count.
1950 -- Wave ((0)) = 17
2000 -- Wave ((1)) = 1550
2009 -- Wave ((2)) = 666
Using the above statistic with a basic pattern of w1 : w3 : w5 = 1 : 1.618 : 1, Wave ((3)) is estimated to be around 3150. S&P500 closed 2929.67 on 21st Sep 2018 and since it is currently on Wave (5), the target of 3150 is very much possible to archive.
The above chart is Shanghai Composite taken from Yahoo Finance and it ranges from 1990 till present. As it does not have a long history compared to S&P500, therefore it results in 2 possible wave count looking at Supercycle degree.
Scenario 1 is 2007 is the peak of Wave ((1)) and Wave ((2)) correction ended in 2014. The peak in 2015 is the Cycle degree Wave (1) of Supercycle degree Wave ((3)). The correction now (maybe still ongoing or ended) is Cycle degree Wave (2) of Supercycle degree Wave ((3)). Just for those curious what will the peak of Wave ((3)) be as a guideline.
1900 -- Wave ((0)) = 114
2007 -- Wave ((1)) = 6124
2014 -- Wave ((2)) = 1850
Using the above statistic with a basic pattern of w1 : w3 : w5 = 1 : 1.618 : 1, Wave ((3)) is estimated to be around 11574.
1900 -- Wave ((0)) = 114
2007 -- Wave ((1)) = 6124
2014 -- Wave ((2)) = 1850
Using the above statistic with a basic pattern of w1 : w3 : w5 = 1 : 1.618 : 1, Wave ((3)) is estimated to be around 11574.
Scenario 2 is 2007 is the peak of Wave ((1)) and from then now till now Shanghai Composite enters a triangle pattern (a-b-c-d-e) correction for Supercycle degree Wave ((2)). The correction is yet to run its full course as it is still on wave c. After the completion of this correction will start the Supercycle Wave ((3)). The scenario shall invalidate if the next up trend surpass the peak of node b as that will invalidate the triangle shape.
Both the China & US stock markets, an indicator of respective economy, are totally out of sync for sure. While US market is in the last stretch of Supercycle Wave ((3)), China market is either yet to start or just started that same wave. There are plus things for global economy for the out-of-sync between the 2 but will not be discuss here.
It is obvious US market is already on the Wave ((3)) long long long before Trump became the US President and initiated the trade war. In fact the credit should go to the former US President Barrack Obama for the strong rise in US market as it is during his 8-years term (2009 to 2017) that US economy got out of the 2008 GFC and started the Wave ((3)). China market on the other hand was in Wave ((2)) correction long long long before Trump became US President and initiated the trade war. This is mainly due to China reform its economy from heavily rely on export to focus on consumer consumption. When US market goes into Wave ((4)) correction (a Supercycle degree correction is not a market pull back of 10% to 15% but a recession) and China market starts the impulse Wave ((3)) next, can one still say US emerges the winner for the trade war ? So what strong evidence is there that the winner of the current trade war can be viewed from their respective stock market performance ?
For those who still insist the current stock market performance can decide the winner of the trade war, do more research on the stock market first. Do Not Just Pluck Any Number In The Air To Support The Claim !
