Monday, September 21, 2009

Shanghai Index And The S&P500

Above is a daily chart of the S&P500 and the Shanghai index. As you can see the Shanghai index is showing a bearish divergence compared to the S&P500. The S&P is clearly above its August high but the Shanghai index is not only below its August high but below its 50 day moving average as well.

I think this bearish divergence may put pressure on the S&P but the market to short would be the Shanghai index as this index is the weaker of the two. If you place a stochastic oscillator on the shanghai index you will see that the oscillator has just given a sell signal. I'm looking for the Shanghai index to test its September low however a move above last week's high will negate the bearish outlook.


Anonymous said...

How do you short the Shanghi Index?

Anonymous said...

You become chinese.. Unfortunately there is no international trading at the shanghai stockmarket, all chinese funds and etf:s are trading other chinese markets

Kevin said...

I agree, there is no way to directly trade the Shanghai index. The reason I posted a chart about this index is because I believe this market leads the S&P at times.

SS said...

Trading the FXI or FXP would give you the needed exposure to the Chinese markets.

mingworld said...

I think you can short the Chinese by using UltraShort FTSE/Xinhua China25 Proshares (FXP)



mingworld said...

The fact that 60 Day EMA of Shanghai Index is flattening and turning down is not a good sign. I think 60D EMA is the life line of the Shanghai index.

Anonymous said...


you HAVE TO make a post about USO asap. in my opinion it is breaking down from the huge triangle consolidation. Definitively worth a post from the master.


Anonymous said...

Yes I have to agree, I think USO is worth discussing here if possible .



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