China's Shanghai Index closed yesterday (Tuesday) at a low not seen
since February 2009. The 1-year Daily chart
below shows that price slipped and closed just below near-term support as the
RSI, MACD, and Stochastics indicators turned down again, with the MACD histogram
beginning to accelerate below zero again.
The next chart is a
Daily ratio chart comparing the Shanghai Index with the S&P
500 Index. What I notice is that price on the Shanghai Index has held up a bit
better than the S&P 500 inasmuch as the SSEC began to rally in late
September, while the SPX has been in a slow decline since then. Price has not
made a new low for the year on this ratio chart.
The next chart is the
same ratio chart, but with the RSI, MACD, and Stochastics indicators added. As
with the first chart, these indicators are still in decline, and the MACD
histogram's decline is still accelerating…signs of recent comparative weakness
of the SSEC to the SPX.
The 1-year
percentage comparison chart below shows the net gains to date on the
SPX versus the net losses on the SSEC.
The next
percentage comparison chart below shows the net gains
from November 7th to date on the SPX versus the net losses on
the SSEC. While the SPX is attempting to rally from its recent lows, the SSEC
has continued to decline and make a new (nearly) four-year low in the process.
This chart is reflecting the recent comparative weakness of the SSEC to the SPX,
as shown on the third chart above.
beginning of a new leg down on the Shanghai Index remains to be seen, but with
downside momentum accelerating again and the other indicators turning down, it
would appear that it may be starting Alternatively, this may be the low point
for 2012, China's Year of the Water Dragon, as I wrote about on January
4th of this year, to, finally, begin a rally into next year…one to watch over
the next days/weeks, along with its performance against the S&P 500 Index.
It's my guess that if European Indices fail to advance with confidence in the
near term, we'll likely see further weakness in the SSEC.
