The Chinese Shanghai Composite Index declined overnight to meet our 3,100 initial downside target, which was first displayed and discussed in Friday’s (August 21st) Weekly Wrap-Up report, to capture a 408 point, 12% decline in 2 days.
Although this initial target being met may help to trigger a near term rally, it does not in any way signal a sustainable bottom.
We have been focusing on Chinese markets all summer because of their positive correlation to, and obvious influence on, the US market. During the same 2 day period, the positively correlated S&P 500 has declined by an additional 104 points or 5%.
Asbury Research subscribers can view our August 21st Weekly Wrap-Up by clicking here.