• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Shanghai Composite: There Is Hope!

Hey folks, the Shanghai Composite, which has been leading the US market for about a year now, has hit its first level of support. I would expect a bounce in China, which of course will offer hope to the US equity bulls.

Last week, I pointed out some key technical levels on the Shanghai Composite Index. See figure 1 a weekly chart. Last week, we were 7% above the first support level, and this week we are at those levels. I would look for Chinese markets and possibly copper and crude oil to stabilize at these levels. It should be noted that crude oil and copper have continued to sell off this past week, and these economically sensitive commodities did not participate in the bounce that was seen with equities.

Figure 1 Shanghai Composite/ weekly
Shanghai Composite - Weekly Chart

In terms of offering hope for the equity bulls, of course, any story can be (and will be) spun positively. From a technical perspective, it still is and always has been my contention that investor sentiment must turn bearish (i.e., bull signal) and key support levels must be broken before a new trading rally can start. If this doesn't happen, then it will be the same old story of quick rallies and sudden sell offs ala March to October, 2007. In hindsight, that was a market top, but it wasn't confirmed until the first bull signal (i.e., when investor sentiment turned bearish) failed to lead to a meaningful bounce.

 

Back to homepage

Leave a comment

Leave a comment