China's Shanghai Composite rose 80 percent in 2009, though the index gave back 14 percent in 2010. The index is close to even so far this year.
But when the Shanghai recently showed weakness, the turn was no surprise to Asian-Pacific Short Term Update (APSTU) subscribers:
"China appears ready for a short-term corrective decline based on the bearish RSI divergences we’re seeing on the intraday chart. A pullback to the 2800 level would be a normal correction to the recent advance."
Asian-Pacific Short Term Update (2/20)
Here's another chart that APSTU subscribers saw on February 20 (wave labels removed):
A couple of trading days later the Composite came near the price level APSTU had discussed, as this news account confirmed:
"The China stock market has finished lower in two of three trading days since the end of the six-day winning streak in which it had collected more than 150 points or 5.4 percent. The Shanghai Composite Index finished just above the 2,850-point plateau, and now investors are anticipating further consolidation..."
RTTNews (2/22)
But, the same news article also suggested that the expected "further consolidation" is based on fundamentals:
"The global forecast for the Asian markets remains broadly negative on mounting tensions in the Middle East."
In truth, however, investors who count on the "news" to drive the Shanghai's price trend may be disappointed.
We already know, for example, that China's main stock market index actually moved higher during the two weeks of protest in Egypt. The main protests began January 25; the Shanghai closed at 2,677 on that date. Those protests were still going strong the day before Mubarak resigned on February 10. On that date the index closed at 2,818.