"You have mentioned the over-supply situation with respect to Chinese market many times."

David Fuller's view Many thanks for this report.

China's Shanghai A-Shares (weekly & daily) fell steadily following the rally to 3200 in mid-April, before encountering support from the February low near 2800. Overall, the broad trading range looks like a lengthy base extension phase.

While there is a Sisyphean aspect to these large patterns, veteran subscribers will know that they eventually support sustained upside trends. There is every chance that this will happen with the Shanghai A-Shares Index over the medium to longer term, not least because PER valuations have fallen back to levels of previous support from which strong rallies were launched.

The timing for the next advance probably depends on a shift in China's monetary priorities from controlling inflation to stimulating GDP growth once again, but the charts will show us. For this to occur sooner rather than later, we would need to see a strong rebound from current levels, taking out the last two range highs.