Last week we sent out a note to subscribers (see which membership level is right for you) highlighting the potential for a breakout in China’s Shanghai Composite — its most widely followed equity index.  As shown below, that breakout came indeed, and it has yet to run out of steam.

You can’t see it in the six-month chart of the Shanghai Composite above, but the level that the index just broke is very key because it represents a new post-Financial Crisis high.  As shown below, China’s equity market looks nothing like the US over the last ten years.  While the US market traded to new all-time highs back in 2013, Chinese equities have been struggling to get out of bear market territory.  Only recently has China begun to surge again.

This recent break higher above resistance at its 2009 highs gives it more room to run on the upside.  And run it will need to do to get back to its pre-Financial Crisis highs.  To get back above the 6,000 level it saw prior to its crash, the Shanghai needs to rally another 70% from here.