Let's look at the two weekly charts above: one is the S&P500 index (500 biggest market caps in USA), the other is the Shanghai index.
The Shanghai index has acted in the past as a leading indicator as China is seen as the economic motor nowadays : it is the country with the highest GDP growth in the world. However this index is now lagging compared to the S&P500 index: the S&P500 is above the 40 week moving average whereas the Shanghai index started going under this moving average 2 weeks ago. This raises a red flag: a price divergence between these two indexes is a concern for any trader.
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