Shanghai Stock Exchange Index Update - 18Jul2010

We previously observed the break-down of SSE from the descending triangle, and expected it to head toward the thereabouts of 2200 points in this blog entry. However, SSE rebounded strongly in the following sessions, and it once even hit the support turn resistance levels of 2475.  Unfortunately, the rebound didn't sustain, and it again began to trend down.

Looking at the daily chart, the GMMA is still trending down, the separation between the long term GMMA and short term GMMA maintains.  This means the down trend is still intact.  Further downside is to be expected. 

There has been some talk about a reverse of the tightening policy in China.  If that becomes true, we will expect a reverse in the trend as well.  People invested in China stocks may like to pay closer attention to such developments.