The Power of the Pattern reflected that the Shanghai Index was starting to break support on May 25th, 2011 at (1) in the chart below. What has happened since this break of support? The Shanghai index has declined 28% since the breakdown! (see Shanghai breakdown post here)
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Now the Shanghai index is breaking down from another large flag pattern in the chart below at (2).
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Could this index fall another 28% on a breakdown of this multi-year flag pattern? I don’t know!
I do know this… the breakdown last year impacted emerging markets a great deal and U.S. markets (SPY) for a while. A further breakdown from here should be respected and odds are high would impact emerging markets again!
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Chris: Congrats on having Stansberry’s Daily Crux blurb pick up the chart you posted yesterday. You appear to be travelling in good company! 🙂
Query: Will your next silver posting show the Lone Ranger’s ride?
Best regards, Tony J.