CLICK ON CHART TO ENLARGE
Is what happens in China important to the rest of the world? I would guess a few would say yes. When it comes to stock market performance, is what happens in China important to the S&P 500 or other global stock markets? I would guess a few would say yes again.
Over the past 5-years the Shanghai Index and the S&P 500 have been heading in different directions to say the least. The Shanghai index finds itself worth almost a third less than 5-years ago, while the S&P is up nearly 100%. Needless to say this is one of the larger performance spread differences in years and years!
At this time the Shanghai index is facing dual resistance at (1) in the chart above with momentum at lofty levels, actually the highest since its 2009 highs.
Should the Shanghai Index break above this resistance, it should be considered a positive breakout and it could become a positive global influence.
The Shanghai index is not the only index up against multi-year resistance at this time, check out the price situation in Japan right now (see here)
Is it worth keeping a close eye on the future prices of the Shanghai & Nikkei 225 index and how they could influence other global stock markets? I believe so.
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