• 724 days Will The ECB Continue To Hike Rates?
  • 724 days Forbes: Aramco Remains Largest Company In The Middle East
  • 726 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,126 days Could Crypto Overtake Traditional Investment?
  • 1,130 days Americans Still Quitting Jobs At Record Pace
  • 1,132 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,135 days Is The Dollar Too Strong?
  • 1,136 days Big Tech Disappoints Investors on Earnings Calls
  • 1,137 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,138 days China Is Quietly Trying To Distance Itself From Russia
  • 1,139 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,143 days Crypto Investors Won Big In 2021
  • 1,143 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,144 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,146 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,146 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,150 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,150 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,151 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,153 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Mike Paulenoff

Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com, a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies,…

Contact Author

  1. Home
  2. Markets
  3. Other

Charts to Watch as China Rallies

After consolidating for four sessions right around its August 2009-October 2010 down trendline, today the Shanghai Composite Index accelerated to the upside to 3,051 in what looks like the start of a new upleg that could be heading for a test of its April high at 3182, or another +4.3%.

Meanwhile, the SPX hit a new post- July high today at 1196, possibly on the way to a test of its Apr. high, up 2.5% from current levels. At this juncture, only a decline that breaks 2,950 will argue that the Sept. 20th upleg in the Shanghai is complete. Finally, let's also notice that RSI for neither index has confirmed today's new highs, which is a warning signal that the Jul-Oct upmove likely is getting a bit long-winded.

Strength in the Shanghai index should continue to benefit names likes Arch Coal (ACI), Walter Energy (WLT), and Freeport-McMoRan Copper & Gold (FCX). See chart below.

Looking at the chart on ACI, my near-term pattern work indicates that all of the action (weakness) since the early Oct high at 27.31/37 has the right look of a completed or nearly completed correction within the larger July-Oct advance. For the past three sessions, ACI has found support along the rising 50 DMA, now at 24.92, with the slightly rising 200 DMA now at 23.81. The entire upmove from 19.09 to 27.37 is part of a larger, high-level consolidation period that started back at the Jan. high of 28.34, and which when complete, should provide the launchpad for a powerful new upleg 30.50, and then perhaps 34.00-35.00 thereafter.

Such an outcome could be closely tied to the Chinese economy and the need for procurement of coal and other mining and building materials. For now, with the Shanghai Composite in a very strong technical position, we want to remain long ACI in our model portfolio unless and until it breaks and closes beneath its 200 DMA.

ACI Chart

Daily Shanghai Composite

 

Back to homepage

Leave a comment

Leave a comment