Shanghai Index was working on breaking below its flag pattern back in May, reflected in the Chart below (see post here) This breakdown was not the best of signs for the global economy!
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The support line gave way at (1) in the chart above and most stock markets around the world declined. The chart below reflects the Shanghai index broke below a series of support lines of late at (1) .
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The break of support at (1) was not a good sign for this index, nor the worlds stock markets.
Now a key line dating back to 1994 is a few percent below current prices. If the Shanghai index fails to “hold onto support” line (2), the message would be for further global softness.
