The rest of the world is throwing a stock-market party. Everyone got an invitation... except China. This is the idea behind our chart of the week.
From the U.S. to Canada to Brazil, stock markets are either at or near yearly highs... and the pretty people on CNBC are ecstatic again. But as you can see from our one-year chart of the benchmark Shanghai Composite, Chinese stocks are struggling right now.
Those bearish on China would tell you this "rest of the world strong, China weak" development means serious trouble is ahead for China's overheating economy. Those bullish on China will say this market is simply taking a "breather."
Either way, keep an eye on this important index. Late last year, it made three attempts to best its August high (red arrows). Each one failed more miserably than the next. If it breaks the February low (blue arrow), we'll be trading on the bears' side.
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