Mike Paulenoff chart analysis on the Shanghai Composite
Mike notes in his Mid-Day Minute today: The Shanghai Composite Index closed higher for the seventh consecutive session, and more importantly from a technical perspective closed above its (now flat) 50 DMA for the first time since mid-April. The strength extends the July rally, which could be morphing into a technically significant key monthly upside reversal.
If the SH Comp hurdles and remains above the June high at 2598.33 at Friday's close, then the benchmark China equity index will register a potentially very powerful positive technical signal that should be associated with a near and possibly intermediate-term turn in trend. ETF traders may want to watch the iShares FTSE/Xinhua China 25 Index (FXI). Such a signal could have meaningful positive implications for global growth, corporate profits, and equity prices.