That topping pattern is almost complete. Once the lower horizontal breaks ($42.47), it’s adios.
Monday was a good start to the week. I’d like to suggest that emerging markets are just about to get whacked on the side of the head. The magenta pattern below is the top. The green area is the failed bullish breakout zone. It is my considered opinion prices are about to descend deep within the green again.
I last wrote about China’s Shanghai Index (as part of a comprehensive review of major world markets) on January 29th. Since then, and, until June, the road to recovery from its lows of the year has been volatile and rocky. The last half of this year has seen a fairly steady, if choppy, advance to its current level just below its next resistance level of 3250, as shown on the following Daily chart.
In that post, I had mentioned that a rally to (and hold above) 3000 could thwart a major downdraft, as was being threatened by an imminent break of a neckline of a massive Head & Shoulders formation.