China $SHCOMP daily RSI hit 88 today, one of the highest of all time.

In the 30 years of this index, extreme momentum was very rare – associated with the early stages of massive rallies.

Looks like the summer could get hot. pic.twitter.com/TL7zvEVTdA

— Macro Charts (@MacroCharts) July 6, 2020

Today’s Chart of the Day was shared on Twitter by Macro Charts (@MacroCharts). It’s a chart of the Shanghai Composite over the past thirty years. Chinese stocks have been gaining some serious momentum recently. Macro Charts points out that the daily Relative Strength Index (RSI) printed one of its highest readings of all-time today. As you can see by the green dots, extreme momentum spikes like this have preceded sharp multi-year rallies. In a separate comment, Andrew Thrasher gave us a great way to think about this chart; “Elevated momentum is a good thing. Would you pick the race car speeding up or slowing down to win a race?” Could Chinese Stocks and the Shanghai Composite be in the early innings of another monster rally, similar to what we saw in 2006-2007 and 2015?