Chinese stocks could be rolling over
Chinese and emerging market equities surged a few weeks ago, triggering many breadth extremes (e.g. % of members overbought). Now that EM has somewhat pulled back, an increasing % of Hang Seng Index and Shanghai Composite members are rolling over with a MACD sell signal. Worrisome?
When 40% of Hang Seng Index members triggered a MACD sell signal, it wasn't a terribly convincing bearish factor for HK stocks. Sure, historical cases from 2018-present were mostly bearish for HK stocks over the next 3-6 months. But before that, this was neither a consistently bearish nor bullish factor.
In China, 40% of Shanghai Composite members have triggered a MACD sell signal:
Historical cases over the past 5 years usually led to pullbacks in the Shanghai Composite: