With today's chart, we pass along one of the most impressive showings in the market right now. It comes courtesy of China…
As the workshop to the world and its most important commodity consumer, China is a critical economy to monitor. If China is struggling, manufacturing firms around the world are struggling.
In early April, China's benchmark stock index, the Shanghai Composite, began a major decline that shaved 22% off the index in just over two months. During the decline, we labeled the 2,600 area a "must hold" level to convince us things were holding together in China.
As you can see from today's chart, the Shanghai Index briefly dipped below 2,600 in late June. But in the past few weeks, it has staged an incredible rally to climb back above the level. This new strength is no cause to stop worrying about China's economy… but it's a major step in the right direction for stock market bulls.
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