Strawberry Blonde's Market Summary: China Bounce or Catastrophic Drop Coming?

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Thursday, May 11, 2017

China Bounce or Catastrophic Drop Coming?

Further to my post of May 7, the following Daily comparison and ratio charts of China's Shanghai Index (SSEC) and Australia's Composite Index (AORD) show that SSEC now sits at long-term major support (in both instances), once again, and is vulnerable to further weakness in comparison with AORD.

We'll see if the Shanghai Index can muster a bounce here and gain any kind of sustainable strength and momentum to support an eventual breakout to higher prices in the Australian Index, or whether a plunge here produces a follow-on drop in AORD.

Failure at current levels could produce a catastrophic and swift drop for China down to the lows produced in 2014.