China Shanghai SSE suffered steep heavy selloff today as re-escalation of US-China trade war. The SSE dropped -5.58% to close at 2906.46, just barely held on to 2900 handle. For the near term, 38.2% retracement of 2440.90 to 3288.45 at 2964.68 was taken out with ease. Further decline is now expected to be seen back to 61.8% retracement at 2764.66.
In the bigger picture, we’re favoring the case that long term corrective fall from 5178.19 (2015 high) has completed with three waves down to 2440.90 (2019 low), on bullish convergence condition in weekly MACD. Hence, we’d expect strong support below above mentioned 2764.66 to contain downside and bring reversal. This will, for now remain the preferred case, unless of course, if 2440.90 is firmly taken out.