Is the Recovery Rally in the China Shanghai Composite Index Over?

Below is what we discussed back on Oct 14 (exactly one week ago), when my work suggested that all of the action off of the Aug low at 2850 exhibits counter-trend, and bear-market rally form that should peak somewhere around the 3500 area, prior to the initiation of another downleg that presses to a new low.

Today's key, downside reversal in the Shanghai Composite (SHCOMP) is exactly the type of technical action and signal that indicates the recovery rally is over, and that the dominant downtrend has resumed.

Only a climb above 3447.25 will neutralize today's glaring signal that the China equity market is not out of the woods just yet. MJP 10/21/15

My pattern work is warning me that all of the action off of the 8/26 low at 2850.71 exhibits counter trend form, rather than the form of the initiation of a new upleg after the creation of a significant bottom. While the developing recovery-rally pattern might extend up to the 3500 area, the larger pattern continues to argue for another downleg into the 2650 target zone. MJP 10/14/15

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