If we see higher risk assets further over-valued, do not chase the move, but rather sell into price ...
If the Shanghai Breaks Out of This, It Could Be Huge for the S&P 500
11/07/2014 7:00 am EST
Worth keeping an eye on the Shanghai index and how it can influence other global stock markets? Chris Kimble, of Kimble Charting Solutions, thinks so and explains that, should the Shanghai break above resistance, it could become a positive global influence.
Is what happens in China important to the rest of the world? I would guess a few would say yes. When it comes to stock market performance, is what happens in China important to the S&P 500 or other global stock markets? I would guess a few would say yes, again.
Over the past five-years, the Shanghai Index (IX:SHANG) and the S&P 500 (SPX) have been heading in different directions to say the least. The Shanghai index finds itself worth almost a third less than five-years ago, while the S&P is up nearly 100%. Needless to say, this is one of the larger performance spread differences in years and years.
At this time, the Shanghai index is facing dual resistance at (1) in the chart above—with momentum at lofty levels—actually the highest since its 2009 highs.
Should the Shanghai Index break above this resistance, it should be considered a positive breakout and it could become a positive global influence.
The Shanghai index is not the only index up against multi-year resistance at this time, check out the price situation in Japan right now.
Is it worth keeping a close eye on the future prices of the Shanghai & Nikkei 225 index and how they could influence other global stock markets? I believe so.
By Chris Kimble, Founder, Kimble Charting Solutions
Related Articles on MARKETS
Our U.S. equity timing models remain overall on buy signals. Our foreign equity timing model went on...
Tuesday is a day of jitters about central bankers, forex rates in Sweden and UK, Australian bond pri...
Alexion Pharmaceuticals (ALXN) is a biopharmaceutical company that researches and manufactures treat...