China will be a key signal

Whilst US equity indexes saw a day of very muted price action, there were notable gains in the Chinese Shanghai comp', which settled +3.3% @ 3287. A few daily closes >3400 would be suggestive the communist leadership have finally achieved their aim of stalling the down wave from June.


China, daily

Summary

Clearly, the SSEC is challenging the declining resistance/trend, but infinitely more important is the 3400 threshold.

Lets be clear...

A failure to clear 3400 would be a real problem for the bull maniacs, and offer renewed weakness, with viable new lows into November.

On the flip side.. a few daily closes in the 3400s will offer the first real sign that the collapse wave (from the 5100s).. is probably complete.

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Looking ahead

There is very little scheduled tomorrow... just US Treasury budget data at 2pm.

*Fed official Bullard is due to speak in the early morning, and that might make for an excuse for an initial moderate sell down before resuming higher.
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Goodnight from London