Shanghai Headfake

There is plenty going on here in the US, like the recent collapse of JPM (I can go on and on about how I warned everyone in early May of the 50day moving average break...but I won't) the upcoming everyone-is-waiting-with-baited-breath FB IPO, and a host of other developments. So why talk about something halfway around the world?

Simply, China like small caps here in the US, is a risk on trade. And for their index to show strength by trading over its 200day moving average for a few days, and then to fail, is worthy of a brief post. Not only for its risk, or shunning of, importance but because it is likely not being talked about anywhere else because there are so many other things to focus on.

Anyway, the Shanghai Composite is approaching its 100day moving average near 2330 as well as some important support near 2300. If the index can hold in that area, it may be an indication of what's to come here in the US. If it can't hold it may also be a forewarning of more selling on our shores. Just something to watch four a possible tide change, canary in the coal mine, or whatever you want to call it while plenty attention is being diverted elsewhere.