The Shanghai Index consolidation retest of the uptrend was stronger than expected. However the dip to the low of 3193 followed by a close at the high of 3237 is typical of a market re-correction. Investors saw this pattern on 2017, January 16 with a dip to 3044 followed by a higher close at 3105. This panic low signaled the start of the uptrend from 3105 to 3260.
The current dip and rapid rebound rally has the same characteristics as 2017, January 16 so investors wee this as a bullish signal. This is confirmed with the behavior of the long term Guppy Multiple Moving Averages group of averages. These remain widely separated. This group of averages absorbed the dip and selloff and this shows strong investor support for the uptrend. The long term GMMA did not show any compression during this week's market retreat and this further confirms investor confidence.