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DeMark Sees Shanghai Dropping 8% Before Resuming Rebound

The Shanghai Composite Index will retreat about 8 percent before resuming gains as the surge in Chinese stocks has exhausted buyers, according to Tom DeMark, the creator of indicators to show turning points in securities.

The gauge of domestic Chinese equities will fall to within a range of 2,230 to 2,250 after generating a sell signal on a Combo chart that’s designed to identify market tops and lows, said DeMark, who correctly called the market’s bottom last year. The Shanghai index dropped 0.7 percent to 2,418.53 at the close, after climbing 24 percent from an almost four-year low reached in December.