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Could China be sending an important message to stocks around the world? Very possible.

This chart looks at the Shangai Index on a monthly basis since the early 2000s.

The index has peaked twice in the past 6-yeas at its 50% Fibonacci retracement level. These peaks took place in 2015 and 2017 and were followed by declines of at least 25%.

The past two months it has tested this 6-year resistance line/50% Fibonacci level, where it created back-to-back monthly bearish reversal patterns.

If the index closes much below rising support at the end of the month at (1), it sends a cautionary message to stocks around the world. Keep a close eye on China for the next few weeks, as it could send an important message to stocks in the states.