I've been pointing out for quite a few weeks during any rallies in the market that China and copper were not confirming those upward moves. [Jun 23, 2010: Copper & Baltic Dry Index Not Confirming Any Firm Reason for Rallying] But we might have a change in mood happening on this rally.
I mentioned yesterday that copper made a positive move over key resistance Wednesday; yesterday it continued upward in solid fashion and is now back to levels last seen in late May. All other things held constant this is a positive.
I've pointed out China has been *so* week that it has had trouble even getting over the 20 day moving average for months. That changed this week as China rallied 6.1% on the week and the Shanghai index rallied exactly to the 50 day moving average with a Friday close of 2572 (stockcharts.com data for foreign markets is delayed by 1 day). It appears squiggly line analysis even matters in the Far East. While breaking over the 20 day moving average is not much to celebrate, in a relative sense to how pathetic that market has been acting since mid April, this is a change for the better, and something to take notice of.
Both charts now are set up for some important decisions in the next few sessions... not surprisingly at the exact same moment every trader in the world is waiting to buy the domestic S&P 500 on a break over 1100. (200 day simple moving average on S&P 500 is 1113 by the way)
Long story short, a lot of inflection points could be right ahead - if they work out in tandem we could be setting up for the first meaningful rally that need not be sold within 7-8 sessions, in months.
That said, I'd feel much more comfortable with that assessment if 10 year treasuries could get out of their own way.