The Shanghai Composite and Wilshire 5000 at Resistance
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In April of 2011, we shared that the Shanghai Index was up against the top of its Flag/Pennant pattern in the 3-pack below (see post here). This resistance was sending a message to either harvest gains in the key global index or protect risk trade assets. The Shanghai index peaked at this time and fell in prices, as did stock prices around the world.
Over the past 5 years, the Shanghai and the Wilshire 5000 have twice peaked together, first in 2007 and more recently in 2011. Now both of these key markets are facing resistance at the same time. Currently the momentum in the markets is positive. For momentum to remain in the driver's seat and stock prices to continue moving higher, the Shanghai Composite and Wilshire 5000 need to break these resistance lines.
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