Can The Shanghai Index Lead The Way Higher?

As a trader I've learned over the years to always be open minded when it comes to analyzing the markets. Even though I'm bearish on the stock market based on the 4 year cycle and the weak technicals, I still need to be on the lookout for signs of a rally.

One market that I really like to follow and I know most other analysts almost never mention is the Shanghai Index. The reason why I follow this market so closely is because the Shanghai index was the strongest stock index from January 2006 to October 2007. This market was a leader of all stock indices during that time.

Now we fast forward to March 2009 and we see all the major stock indices falling apart and breaking low except for the Shanghai index. As you can see in the above chart, the Shanghai index is showing a very significant bullish divergence.
From the beginning of this year the S&P has been moving lower while the Shanghai index has been trending higher and is now sitting on it's 50 day moving average.

So what does this mean? Well, the Shanghai index is once again the strongest stock index but is it enough to save our market? Will the Shanghai index lead the way higher as it has done so in the past? Is this the first signs of a recovery for the world stock markets? I'm not going to pretend to know the answers so I'll let the markets speak for themselves. I just thought I'd share with all of you my observations and thoughts.