The Chinese market had a sharp sell-off in early June. Since then, however, we've seen a sustained and very solid rally. Prices consolidated in a triangle pattern through September and August, with prices using the rally's trend line as the lower line of support. The MACD was declining during this time, but this is a standard technical development during periods of consolidation.
Last week prices took a major drop, breaking support. This is occurring right inside a key technical area -- the Fibonacci retracement levels from the early February highs and late September lows. Adding to the importance of this development is it's occurring around the 200 day EMA.
