A Wealth Preserver Is Required for a 2008 Sized Crash and It’s Tiny Compared To What Is Coming

A Wealth Preserver Is Required for a 2008 Sized Crash and It’s Tiny Compared To What Is Coming


 Sep 3, 2018 at 3:00 PM

Hong Kong Triple Play Trend Trader

Hong Kong Triple Play Trend Trader

To our Hong Kong friends; 我希望你一切都好,

This update is based on the Hang Seng Index (HSI). The Hang Seng Index or HSI is a market cap weighted index of the largest companies that trade on the Hong Kong Exchange. A subsidiary of the Hang Seng Bank maintains the Hang Seng Index and has done so since 1969. The index aims to capture the leadership of the Hong Kong exchange and covers approximately 65% of its total market capitalization.

Similar to the S&P500 Index in the USA, the HSI index can help gage and guide investors in efficient market growth. So, in basic language “as goes this index so goes your Hong Kong-based portfolio.”

The charts below can help you take a three-step top-down review of how the HSI is performing and whether you should Invest more money or protect against a pending crash.

Monthly Chart:

The monthly level of a market is where the long-term trend is defined. Let’s start by looking at a Monthly chart first fo find the markets actual Long term direction.

As you can see in the chart below, from the 2016 green arrow entry point, we had a tremendous gain that closed out in May and confirmed what we reported was developing in 2018.  The historical major high took place back in 2007 and we have then witnessed a bearish subsequent trend for 10 years. The correction since that high has been approximately 33% decline with the next general key area to watch would be 18216 and a closing below this area can technically signal a more serious correction.


Weekly Chart:

The last high on the weekly level was created during the week of May 14th. The previous weekly level low was 21488 which formed during the week of December 26th. In fact, in support of the larger Monthly trend, we still remain below key support on the weekly chart below and recently had a confirming weekly Red signal.


Daily Chart:

Daily level of this market is currently in a full bearish mode.


Hong Kong Market Conclusion:

Based on reviewing the Monthly, Weekly, and Daily charts, the Hong Kong market is significantly bearish and we would avoid taking any immediate or intermediate longs  As you can see, even though our daily charts showed some bullish green lights in July, wise investors likely avoided taking the positions, because both the weekly and monthly charts warned the larger trend was strongly down.

Hong Kong is a perfect example of why you should trend trade and take positions with the trend. More importantly, only do so when all three Monthly, Weekly, and Daily are supporting the same trend.

Fighting the monthly and weekly “current” trend does not usually prove fruitful.


Good Luck,

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