China entered a bull market Thursday, a surprising milestone after a volatile summer wiped out trillions in value from mainland equities and rattled global markets.On May 23, 2000, the Nasdaq bottomed at 3164.55 and went on to reach 4274.67 on July 17, 2000 a gain of 35%. The ChiNext is up about 43% from its bottom on September 15.
The Shanghai Composite Index has gained 20.3% since Aug. 26, the bottom of the summer selloff. A bull market is defined as a rise of 20% from a recent low.
The gain in the Shanghai Composite doesn't even qualify as a shallow Fibonacci retracement yet:
The Fibonacci Retracements Tool at StockCharts shows four common retracements: 23.6%, 38.2%, 50% and 61.8%. From the Fibonacci section above, it is clear that 23.6%, 38.2% and 61.8% stem from ratios found within the Fibonacci sequence. The 50% retracement is not based on a Fibonacci number. Instead, this number stems from Dow Theory's assertion that the Averages often retrace half their prior move.
Based on depth, we can consider a 23.6% retracement to be relatively shallow. Such retracements would be appropriate for flags or short pullbacks. Retracements in the 38.2%-50% range would be considered moderate. Even though deeper, the 61.8% retracement can be referred to as the golden retracement. It is, after all, based on the Golden Ratio.
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