The Shanghai Composite Needs a Bounce
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The Shanghai Stock Exchange (SSE) is closed this week for the Mid-autumn Festival and the National Day of 2012. Let's use this pause as an opportunity to take a closer look the benchmark index of this exchange.
The Shanghai Composite finds itself on two multi-year support lines at (2) in the chart below. In the past, when this index has hit these support lines, it has bounced.
Global markets, and especially commodities, NEED this index to bounce off of support.
Should this support setup fail, the Shanghai index would be sending a message that further slowing in China is in the cards.
The next move would impact how investors will want to structure their portfolios, especially in the commodity complex.
(c) Kimble Charting Solutions