Is one of the hottest stock indices in the world about to peak? Possible.

The S&P is off to a great start this year, up over 12%. Yet the Shanghai index is white hot, up around 22%, almost twice as much as the S&P 500!

This chart looks at the Shanghai Index over the past 25-years on a weekly basis. It has spent the majority of the past 25-year above rising support line (1). It hit this rising support line in December, where a very strong counter-trend rally has taken place.

Over the past 4-years, the index has created a series of lower highs, which forms the line (2). The 90-day counter-trend rally now has the Shanghai index testing falling resistance at (3).

What this white-hot index does at (3), will send a very important message to stocks around the world. Keep a close eye on the Shanghai index going forward friends!!!

 

 

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