By David Scutt, From Business Insider Australia

While China’s stock market suffered one of the largest declines on record yesterday, we ain’t seen nothing yet, according to the man who predicted the low point for the Shanghai Composite index in 2013.

Tom DeMark, founder Arizona-based DeMark Analytics, believes there’s significant carnage still to come.

He’s predicting China’s stock market will decline by an additional 14% over the next three weeks as the market demonstrates a trading pattern that mimics that of the 1929 US crash, according to a report from Bloomberg.

DeMark suggests the benchmark Shanghai Composite index will sink to 3,200 points in the weeks ahead, extending the decline from the June 12 peak to 38%.

The premise of his call is that “the gauge’s moves since March are tracking those of the Dow Jones Industrial Average in 1929 when the gauge lost as much as 48%”.

Despite the threat of government intervention undermining his call, DeMark believes his market indicators are most effective when the market is “manipulated”.

“Lip service and intervention like that — it’s false,” said DeMark, adding “there’s a certain way in which the market unfolds. The only thing the government could do is to postpone it.”

DeMark believes that despite renewed talk from the CSRC, China’s stock market regulator, that they will step up efforts to underpin the market, the increased intervention won’t be enough to sustain the 16% rally seen since the index bottomed earlier this month.

“Markets bottom on bad news, not good news. You want to have the last seller sell. We got good news at the recent low. The rally is artificial,” he said.

Trading in mainland Chinese markets will get underway at 11.30am AEST.

You can read more here, including some of DeMarks previous calls – successful and not.

IMAGES:
Mount HuaJimmy Cheng
shanghaiBloomberg/Screenshot The Shanghai Composite Index

For more on this story go to: http://www.businessinsider.com/this-influential-analyst-believes-the-carnage-in-chinas-stock-market-has-only-just-begun-2015-7#ixzz3hu4ECGkc