by Erik McCurdy
The Shanghai composite index closed sharply lower this week, confirming the break below support at the lower boundary of the symmetrical triangle that we noted earlier this week.Click here for large image.
This breakdown on the weekly chart is a bearish intermediate-term development that suggests the cyclical downtrend from 2009 is attempting to reassert itself. A subsequent weekly close below the January low near 2,700 would predict a quick return to congestion support in the 2,600 area.
Erik McCurdy is the senior market technician for Prometheus Market Insight and has been analyzing charts every day for over 15 years. The software program that he developed to monitor long-term stock market trends has correctly predicted over 90% of the long-term turning points in the S&P 500 index since 1940. His Gold Currency Index has predicted every major trend change in the US gold market since its creation in 2005. The Prometheus Market Insight newsletter service provides daily, weekly and monthly forecasts for stocks, bonds, currencies, commodities and precious metals using proven computer models that base their predictions on technical and cycle analysis. Stay in touch: Email: [email protected]