Earlier today, NDD noted that the Shanghai market was rallying, implying it was a leading indicator. First, I agree with his assessment that the Chinese market is a leading indicator for the US. Secondly, let's take a look at the chart:
On the weekly chart, the market is at important technical and Fibonacci levels.
We can see the recent rally in more detail on the daily chart. The rally is sharp (a) and has recently retreated from important levels (b).
Today China announced it would increase a key interest rate. This is obviously a short-term negative. But over the next few weeks -- given China's growth rate -- I wouldn't be surprised to see this index move through key resistance.