Shanghai Rally Bodes Well Long-Term

The Shanghai Composite has managed to sustain its initial thrust off the low, and it has broadened out. More than 90% of stocks on the exchange are now trading above their 200-day averages.

Historically, a rally of this magnitude, and with this kind of broad participation, has continued longer-term. It would be an even better sign if the Shanghai manages to hold onto its gains over the next couple of weeks.