The "no way I can lose" market

The latest headline from Bloomberg says it all about Chinese stock market sentiment:

The fierce rally in Chinese stocks has pushed the Shanghai Composite Index's 14 day RSI to its highest level in half a decade:

Such extreme momentum has only been matched several other times over the past 30 years, and they all led to more gains for the Chinese stock market over the next 3 months:

Looking at this from a slightly different angle, the Shanghai Composite Index has rallied 7 days in a row to a 1 year high. Historical cases were still mostly bullish for Chinese equities over the next 2 months:

The Chinese government's "encouragement" to buy stocks has caused Chinese investors, traders, and grandmothers to rush headlong into the stock market. This caused the Shanghai Composite Index's volume to surge, while the S&P 500's volume is thin. To demonstrate this phenomenon on a chart we can create a "Volume Speculation Index".

*Volume Speculation Index = Shanghai Composite volume's 5 day average / S&P 500 volume's 5 day average. Then calculate the ratio's distance from its 50 day average.

Large historical spikes in the volume speculation index led to worse than average returns for Chinese stocks over the next 6-12 months:

In the meantime, the Shanghai McClellan Oscillator is so high that only 3 other days matched yesterday's reading:

The 3 historical cases saw Chinese stocks pullback over the next few weeks and months:

On the other side of the Pacific, tech stocks are rallying nonstop. 38 days in the past 5 months have seen the NASDAQ 100 rally more than 1%:

This usually led to the NASDAQ 100 rallying another week before a pullback could begin: