Chinese shares limit down...

FXI is going to get creamed tomorrow because the Shanghai Composite limited down 7% on Monday.  The supposed reason was "A manufacturing survey earlier pointed to more bad news for the economy.".

OK let's give that "reason" the benefit of the doubt for a second.

Here's the FXI backlink and the model from it is below.  In that post I wrote, "Chinese shares have now entered their C wave down.  Cs are like 3s, they waste no time.  A went very quickly so C should be just as aggressive." 

So is the reason for the coming 7% loss in FXI (it's already a done deal since the trading in China is ahead of the US) due to some report?  If so, did I look into the future?  Am I a genius with super powers to be able to call the action like this?  Or is it much more likely that Elliott waves do a very nice job of predicting herd movements? 

Face it.  Humans are a herding species and herds have habitual behaviors which can be modeled with some level of accuracy.





Importantly, I think that this move down in the Chinese markets will spook global markets because, let's face this too, China is number 2 global economy and would be the #1 global economy if such measures were based on production of real things.  Much of the US GDP is based on financial innovation AKA money games, many of which will eventually come to be considered fraudulent and then made illegal.