Making sense of stamina and resilience in markets
Investors should pay close attention to chart patterns of key indices in the US and China amid trade tensions
Add BT as a preferred sourceTHE two largest markets in the world, the US and China, stand on the brink of a trade war but each shows a very different pattern of behaviour. At first glance, the US - S&P 500 as proxy - appears a much stronger market than the China market but first looks can be deceiving.
Stamina and resilience play a role in determining who will weather the trade war most effectively. Stamina is shown in the S&P index with a strong existing uptrend. The market has been trending up for some time but it's a rise that is fuelled by easy money and credit.
Resilience is shown in the Shanghai index. It is hammering out of a bottom pattern and the developing breakout rallies. Resilience is the ability to get up off the floor after being knocked down and the Shanghai index has had plenty of practice at this.
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