Danger in Shanghai ($SSEC)

The Shanghai stock exchange ($SSEC) recently shed 25% since its highs on early August at 3478 to 2639 in early September, before bouncing back above the 3000 mark last week . The sell signal has been given on the SSEC, as the 20 EMA has crossed below the 50 EMA.

While it is possible for the US stock market to continue its rally in the near term despite the fall in Shanghai, the continued breakdown of the SSEC will inevitably drag down the US markets along with it. The conjoined twins of US and China have wed themselves into an economic partnership - till death do them apart. China needs US to buy its products, and US needs China to buy its debt.