Once Again, We Ask: Can the Plight of the Chinese Equity Markets Negatively Impact the SPX?

Below is what we discussed back on July 7, when the Shanghai Stock Exchange Composite Index (SHCOMP) was in free-fall, falling 30-plus percent off of its multi-year high at 5177, despite the Chinese Government's efforts to support and manipulate prices to the upside.

The Government enjoyed some brief success, managing to goose, The SHCOMP from 3587 to 4185, or by nearly 17% prior to today's near 9%, one-day melt-down (and close on the lows), which has the right look of the initiation of a new down-leg within the still-dominant near-term downtrend.

Let's notice that while the SPX remains within its 6-month sideways range, the price structure once again is approaching a test of key support in and around its up-sloping 200-Day EMA, now at 2060/56, which must contain any forthcoming weakness to avert a press to 2010-1980 thereafter--within an increasingly-toppy medium-term pattern.