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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
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DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Saturday, September 27, 2014

Fragile China?

After the run-up that China's Shanghai Index has had since July of this year, this index may be on the verge of either a sizable decline or a somewhat volatile, and possibly lengthy, consolidation shortly.

The following 3-Year Daily chart shows SSEC to be at a major resistance level, and the RSI and MACD indicators are already in decline and do not support a further advance in SSEC.


The following two 3-Year Daily charts show the relationship of SSEC with SPX. The first shows the SPX below, while the second shows a ratio of the two indices.

The second is of most interest to me, since price on this ratio is also at a major resistance level. Furthermore, the RSI and MACD indicators are also in decline and do not support a further advance in SSEC.



The following two 3-Year Daily charts show the relationship of SSEC with Copper. The first shows Copper below, while the second shows a ratio of the two indices.

As shown on the first chart, the price action of the SSEC and Copper are normally (roughly) in sync; however, they have been at variance since July. The second chart shows that this ratio popped above a resistance level in September, but the RSI and MACD indicators are in decline and do not support a further advance in SSEC.



So, China's Shanghai Index, in relation to either continued strength or upcoming weakness against the SPX and Copper, is worth watching closely over the coming days/weeks for any China buffs.