“The herd/world mar­kets seem to fol­low the lead of the Chi­nese Shang­hai Com­pos­ite Index, said Chris Kim­ble of Kim­ble Chart­ing Solu­tions. “If sup­port remains in place and the Shang­hai Index can rally, this would be a pos­i­tive for global equity mar­kets, the oppo­site of the sit­u­a­tion back at the April highs. Port­fo­lio design/allocations should con­tinue to be influ­enced by the action of the Shang­hai Index.”

I have been alert­ing read­ers to this rela­tion­ship ever since the Shang­hai Index became the first major bourse to exit the credit cri­sis bear mar­ket, lead­ing other mar­kets by about five months.

Click here or on the chart for a larger image.

Source: Kim­ble Chart­ing Solu­tions, Decem­ber 2, 2011.

Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.

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