Monday, August 17, 2009

Shanghai Index Leads S&P Lower



The S&P was down today making a 2 week low catching many traders by surprise but if you've been watching the Shanghai index you would have seen this weakness coming. The Shanghai index began breaking down BEFORE the S&P. A few days ago while the S&P was testing its high, the Shanghai index was moving lower making a 3 week low. This was clearly a warning sign that weakness was just around the corner for our stock market.

6 comments:

Anonymous said...

Where do you see key support on the S&P ?
Thanks for any comments , great blog !

Anonymous said...

Kevin,

Does it only lead by this little time? I thought about 3 months.

Kevin said...

The Shanghai index leads the S&P. Sometimes the lead might be as little as several weeks or as much as several months. If this was an exact science, we all would be making the same trades which means the Shanghai index would no longer lead our market at all.

frank said...

What now? Shangai took a good tumble. S and P only dropped a few % and is back up now.

Mike Truong said...

If you look at the chart, there is a double top on sse. I think we get the flush down either friday or Monday then start the climb higher into mid to late September before we drop again. The drop in September will probably mirror the drop that SSE is experiencing now which implies that we will probably see a 20+% drop into the end of the year. We may end the year lower than we started which preserve two axioms (January effect and Presidential cycle) Just my guess anyway.

Anonymous said...

Today we´d broken the 61% retracement of SPX.
From 1590 in Oct/07 to 660 in Mar/09.

I don´t know if its important.
What ever.

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