China : will the dragon retaliate...?

China- SSE Composite (1875):

Near term Trend : Bearish (Pending reversal) The bull run started in Oct 2005(1067) has ended in Oct 2007(6124). Since then the SSE index felled in a perfect falling parallel channel. See the inlaid monthly chart with respective support/resistance level(s) indicated by arrows.

Before turning up in 2005, the index faced consistent resistance near 1740-1780 mark in 2001,2002 & 2004 (see down arrows). Technically, important resistance zone (on the way up/down) turns into "support" zone, once price moves above/below it. In that sense, now, this 1740-1780 zone should act as a support zone for SSE index on its way down; which is what happened, so far, with lowest down tick of 1802 on 18th Sep 08. Second, is it just a coincidence that we are again in the month of "Oct" with 70% value erosion, in just 12 months? I think we should give "some" respect to this time cycle. Observe that (on the daily chart) the SSE index went way ahead of global leader Dow Jones, on its way down. On 18th Sep Dow was 11019 & Shanghai index was 1895 (low of the day 1802, lowest tick so far in 08). Since then Dow is down over 22% (close basis) & SSE 1.1%. Looks pretty confusing? It could be a) SSE index, as usual, outperformed the Dow on its way down (which is what happening since top) and waiting for a fresh down move, when the difference between two is narrowed OR b) The SSE index has shown lot of resilience despite of global turmoil in the current month. Considering all I am betting on option 'b'. Once the index moves above 2.2k,the things will turn bright (as explained in above para).....& on the downside 1740-1780 is the stop. Lets see......!