Monday, March 16, 2015
China Flirts with a Major Breakout
Headed into the end of last year, China’s Shanghai Composite Index had become significantly extended, registering an unsustainable weekly RSI above 90. At the time (see Here), we expected the index to work off its overbought condition by churning with greater volatility as the market consolidated the massive move that began that summer.
Over the past three months, the SSEC has traded in a wide ~10 percent range, working off the overbought condition as it prepared to challenge the previous highs from 2009. While the week is still young, last night the SSEC broke above its weekly benchmark high set in the summer of 2009.