Mid-2009 uptrend momentum slowing down

The Shanghai Index retreat was first triggered by the announcement of a lending suspension applied to some banks. The down pressure increased when global markets fell dramatically after the US President announced an unexpectedly severe attack on Wall Street and American banks. His proposed measures will destroy the profits of many banks in a financial system that is already weakened by the global financial crisis. The DOW fell further as the full impact of these proposed measures were assessed. Many people worry that this will slow down any American economic recovery.

These news announcements overshadowed China's move up the global economic ladder to become the largest manufacturer in the world, ahead of the US. China also became the second largest economy in the world, overtaking Japan. China is now the second largest destination for direct foreign investment. Despite this bullish news, the Shanghai market turned bearish.

The rapid uptrend growth momentum starting in the middle of 2009 has already slowed. The Shanghai Index developed a trend correction using price in November 2009. This changed into a trend correction using time as the market developed a broad sideways trading pattern. The sideways pattern shows a trend pause. It does not show an uptrend reversal.