"The Shanghai Composite index is sitting right on support and seems quite vulnerable. I am particularly interested because, assuming a further pull back is on the back of economic growth concerns, it would not auger well for the hoped for global recovery and thus could be a trigger for another significant sell off in world markets....the second leg as it were. Your comments would be much appreciated."

David Fuller's view My distinctly unscientific perception, based on what I have seen and heard recently, is that negative sentiment towards China outweighs positive short to medium-term views by at least 10 to 1. Some of us might consider that to be a contrary indicator.

However, the heavy weight and long-term reports crossing my inbox are mostly bullish, and some of them are posted here. This sampling is too small and the sources too authoritative for me to consider long-term bullishness to be a contrary indicator. My guess is that China is the big story for at least the first half of the 21st century.

But what about the technical outlook referred to in the email above (weekly & daily)? It is delicately poised and relative underperformance is a concern. However, that upside key day reversal on 3rd February remains the most significant technical development for nearly two months and today's smaller upward dynamic is encouraging. What I would like to see next, from a bullish perspective, is a break above that downside dynamic on 4th March. What I hope not to see is a decline beneath February's key.

People fear that China's credit tightening might trigger another significant sell-off in world markets. China's monetary policy authorities need to get the balance right if they are to stem property speculation without overkill. This can be a fine balance but they have every incentive to succeed and their gradualist (baby steps) approach to monetary policy tightening seems prudent. They will make some mistakes, like everyone else, but this is a medium-term risk and should have little effect on China's long-term potential.

Meanwhile, global stock markets have recently shown more evidence of a melt-up than a meltdown. The canaries which I refer to frequently in Audios are chirping happily. Investors are climbing the 'wall of worry'. I will worry more when they sound euphoric.