SAMT Blog
A new focus on Chinese and USA equities
06. October 2019, by Mario V. Guffanti
Technical Analysis, Update
In June of this year, I analysed the relative strength ratio between the US S&P 500 stock index and the Chinese stock market (represented by the MSCI International CHINA A on Shore Index). The analysis was proposed in euro, and today I would like to update what I had proposed and evaluate what new information we can obtain.
The first box of the following chart contains the Chinese index; just below we have the American index and at the bottom of the chart is represented the ratio of the relative strength between the two indices. When the relative strength decreases, the American market behaves better than the Chinese one and when it rises, the opposite happens. To exemplify the reading, in the light green area, are indicated the periods in which an index performs better than the other.
In terms of relative strength, we can see that the Chinese stock market has been stronger in four periods (r1, r2, r3 and r4), and particularly strong in the first period started in June 2014 (r1).
The last period of relative strength of the Chinese stock market, which began in October 2018 (see window r4), ...
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