Chinese triangle running short on runway

I've stated many times in these pages what a massive, unsustainable debt Ponzi the Chinese real estate market is.  It is so huge that its collapse could destabilize the entire world.  It is a bigger real estate Ponzi than that which peaked in the US in 2006.  Much bigger.  When economic contagion comes to China it will likely spread like the bird flu.  The only question is when.  Nobody knows the answer to that.

The chart below shows that after the big exponential initial rise of Chinese shares, there was a 3 wave movement down.  Many believed that this was the a-b-c that would be wave 2 and that a huge 3rd wave would be next.  In fact, if you start counting waves in that exponential rise you can tell yourself that the chart pulled back to the prior 4th.  It pulled back so far because the 5th of 1 was massively extended.

Unfortunately, there is a small fly in that ointment.  That initial move up does not count as 5 waves.  It counts as 5-3-5.  The give away is that big pull back in the middle - it was A and B.  The peak could have been 3 but failure to find a higher high ruined that hope.  After that we saw a-b-c back to an inclining double bottom.

This is a complex chart and I don't know how it will play out but I believe it has little time left to decide because the triangle is converging and they rarely continue sideways after the convergence.  They usually make a choice to break out or break down.  The recent chart action looks like the end of a long corrective wave has just happened with the small throw over at red 5 below.  A break above the top red resistance nullifies this model.  A break below the blue line should put investors on high alert and a break below the red means pull the sell trigger.

If this breaks down massively I would be very interested in bottom fishing it.  China is an amazing place these days and it has been buying gold.  Once all the bad debt defaults will will be well positioned with nationalized commercial real estate (or that which has been sold legally for pennies on the dollar), a good cache of gold, and a huge manufacturing industrial base from which to launch the next big wave forward.  Without all the existing debt, I would be totally bullish on the global economy because I am bullish on mankind.  It is the debt, and the debt alone that makes me bearish. When the debt is defaulted upon, it will be time to get massively bullish.  Anyone with cash on hand (including money metals) will be able to pick up once in a life time bargains.

IFF that is, the defaults don't result in global nuclear war which is a growing possibility as the secrets of bomb making fall into increasingly less stable hands.  By that I don't necessarily mean that more 3rd world countries are getting bombs.   I worry more about American warmongers "going Roman".  The Bush doctrine of "strike if you even suspect that the enemy will" changes a lot of history whereby the US and other nations would only strike if someone else hit first.  The less stable hands I'm talking about are the US money elite who might think it better for them personally to start nuclear war than to lose their power in a collapsing debt Ponzi.  They could easily hand Puppet Obama a script that tells him to start nuclear war "for our safety".  And he's just enough of a boot licking elitist a$$ kisser to carry such an order out.  Do not disregard the words on the Georgia Guidestones.  Those who spent the money on that did so for a reason.