A close and hold below last year's low of 1949.46 could spell more trouble ahead for China's Shanghai Index, especially if the moving averages cross over again to form another bearish "Death Cross." There's no positive divergence and no indication of a reversal yet on the RSI, MACD, and Stochastics indicators to suggest that a bounce is imminent.
*UPDATE June 25th @ 11:00 am:
The following chart shows a longer view of the Shanghai Index and shows today's closing price. You can see the weakness and downtrend that it's been in since October 2007.
The next 5-day chart shows Tuesday's intraday action...a move below last year's low and recovery to close above.
From both charts, it would appear that 2000 represents a fair value for the Shanghai to achieve and maintain to signal any kind of committed growth and renewed strength.
*UPDATE June 27th @ 12:00 noon: An interesting article on China: Bloomberg