Tommy Humphreys | Jul 08, 2015 10:41PM ET
The recent parabolic leveraged speculative rise and fall of the Shanghai Composite is reminiscent of silver’s epic rise and crash during 2011. Have a look:
While the chart structures are slightly different (silver rose 50% in barely 6 weeks while Shanghai took about 3 months to do the same), the parallels between these two markets are striking:
If this analog holds true, the Shanghai Composite should find support around the 3400 level which happens to correlate with the rising 200-day simple moving average and resistance dating back to 2009. But it will also mean that the Shanghai market has left its cyclical bull phase and resumed its secular bear market which began in late-2007:
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