The Shanghai Composite is facing a major, critical test...
As we discussed yesterday, the Shanghai Composite is now at a major, critical support level as seen in the chart below.
Last night, the Shanghai Composite closed down -0.78%. This remains a critical level to hold, or the Shanghai could experience a precipitous drop from here. If that should happen, it would put a lot of downside pressure on our stock market as well. Investors should now keep an eye BOTH ... the Shanghai as well as the U.S. markets.
Comments: Note the Relative Strength graph at the top of the chart. The RSI appears to be holding a support line just as the Shanghai's price is at a major long term support test. So, this is the "big test" for the Shanghai Composite right now.
In spite of the RSI finding some support, our S.T. Accelerator is Negatively below its horizontal signal line and not showing any upside strength. If the S.T. Accelerator does not improve quickly, we will see an increased breakdown in the Shanghai's strength.
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