After the media hype of January, the Shanghai A-Share Index has settled down as expected, with lower volumes and volatility confirming a sense of stability at current levels. This is exactly what the doctor ordered. Momentum is now only fractionally bearish and we are no longer oversold. Expect consolidation above 2,750 to 2,800 points until the end of the month, but keep in mind that the long-term outlook is for further small, cautious moves towards 2,500 points because the 50 and 200-day moving averages are bearish. Over the super-long term, we have pencilled in a lot of relatively small waves roughly between 2,200 and 3,200 points – similar to price action between late 2009 and late 2014, though contagion from other global exchanges cannot be ruled out.