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The inverted head and shoulders bottoming formation that I first discussed in early September here, as well as earlier this month in this post here, has come to fruition in the Shanghai Composite Index. It has been an aggressive move higher, once the neckline was finally broken. As the updated daily chart illustrates below, my initial target for the breach of the inverted head and shoulders bottom has now been attained. While I am now neutral in the short-term on the China market as I expect some consolidation in light of the initial target being acquired, I believe the case for a longer-term bearish to bullish reversal is an increasingly likely scenario.
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