David Fuller's view

China’s Shanghai A-Shares Index (weekly & daily) was a serial laggard that is now coming into form, as you can see from this rounding formation on the 10-year chart which has finally broke its long sequence of lower rally highs.  The daily chart shows that a consolidation has been occurring over the last two and a half weeks and Wednesday’s new closing high suggests demand is reasserting itself.  A close beneath 2390 would be required to delay additional upside scope beyond the near term.  Valuations remain competitive with a p/e of 11.04 and yield of 2.94%, according to Bloomberg. 

Wall Street’s S&P 500 (weekly & daily) remains consistent on the 5-year weekly chart, albeit a little overextended and near psychological resistance in the 2000 region.  The daily chart broke its 3-day decline from last Friday’s new all-time high with an upside key day reversal.  A close beneath 1975 is now required to indicate a further pullback towards the 200-day (40-week) moving average.  A close beneath 1900 would be required to indicate pattern deterioration by breaking the lengthy progression of higher reaction lows.

Big-cap miners BHP Billiton and Rio Tinto have slumped over the last month on slow global GDP growth and falling iron ore prices.  These problems persist but the shares showed the first sign of returning demand on Wednesday, rallying from a region of previous support.  BHP’s and Rio’s dividend yields of 4.51% and 4.28%, respectively, should help to cushion downside risk from current levels.