So, news of the minute: the HSI made a new 26-month low today! We’re trding off very important technical levels from the 2008 mess from minute to minute.
Also, the HSI shed 300 points (1.6%) in a matter of 20 minutes after having “stabilized” at around 19120 after the morning fall from its opening around 19320. The opening was still lower than the high point of monday trading, while worldwide markets climbed on tuesday when the HSI was closed for the mid-autumn holiday festival. It’s a harvest festival, but the question is if it harbings markets being reaped?
I would be inclined to say yes. The HSI is essentially in freefall at the moment with no support in sight. It has traded this morning consistently at below 3% of its 21-day stochastic oscillator, indicating the obvious from the charts: new lows consistently being made and all retracements are miniscule. What is suprising is that there is not a stronger fall, but I am expecting this to feed through with a slight delay, and buyers seem to be scattered since there is no longer any close support lines for them to lean on. Volatility should spike further, and the momentum indicators are showing a strong reversal off the HSI August highs, going into bear mode. Refreshed calls for the valuation lows in the region of 17000 as mentioned in this blog earlier.
Welcome to the childrens’ version of roller coaster ride of your life! We are happy to see you here after riding the grown-up version three years ago. A safety reminder; keep hands and feet inside the train at all times.