Bamboo shoots are planted in Chinese soil and the Shanghai Composite's 70 percent march towards 3,000 is very different from the behavior of the S&P. This trend has a more vigorous and robust character.
The downtrend was tested and retested several times in late 2008 before a successful breakout developed. The breakout has then successfully tested and retested the new uptrend three times in 2009. In each case the long term GMMA has absorbed the sell-off and provided a foundation for a strong rebound. The long term GMMA did not compress and it showed increasing investor support for the developing trend. The long term GMMA quickly moved to a broad and consistent separation.
The nature of the trend development is also more secure. This is a step and stairway pattern with a smooth progression between support and resistance levels. The trend reversal developed from a well established historical support and resistance level.
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Although not shown on this chart, the breakout developed from a series of fan trend lines. This is a pattern associated with long term and sustainable trend change. The foundation nature of this trend change is different to the nature of the trend change with the S&P 500.
These bamboo shoots are a better example of sustainable trend recovery. They include features which need to develop in the S&P 500 before we can say with confidence that the green shoots will survive.
Macbeth asked a difficult question and the answer from the witches was elliptical. The answers from these charts are more clear cut.
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