Very worrying sign in the HSI flaring today as well.
Starts the day on a very low note around 20 500 in an abrupt gap down following late night losses in New York, then rising rapidly past 20 700, and then spends the afternoon session rotating out of there into the slightly more comfortable area right above 20 600. This price action did not clear the gap left from yesterday, and essentially leaves it as an empty gap down candle with roughly 50% of total body length being the upside wick! Think you can wave it off as a good bottom buying opportunity or strange aberration? HK$79bn turnover begs to differ…
A true crisis candle, such as appeared after August 5th, would have a downside wick as well represented by buyers trying to come in and snapping low-priced stocks after a panic attack, and perhaps most importantly a larger gap in and of itself. Alas, we didn’t get either, but pretty much everything else clicked the trade patterns for a crisis candle. Still, casinos were gaining really well and providing some excellent market differentiation while the high-beta dumping continued broadly across the market. Galaxy was a pretty good shining star (you could have made more than 6% intraday, having the stock go from HK$17.24 at open to HK$18.36 in the afternoon, and closing at HK$18.04, adding 6 cent vs yesterday) and Sands also did well. SJM closed down slightly, but redeemed itself above the 21/252 SMA cross in the afternoon, which was a line in the sand for most of the day, and closed it into the trendline posted yesterday. Still, a swing below HK$14.8, and then settling above HK$15.3 on the day is pretty marvelous, and shows how strong the trend is here.
The same rosy picture did not prevail in financials, where naturally ICBC saw its falls continue, and HKEx not getting spared the carnage either (both slightly more than 1% down), with the HSI financials down 1.37% on the day.
All eyes at the moment then is naturally on the US data flood out today (petroleum stockpiles, slight info on jobs and productivity) but currently German manufacturing order collapse is bringing the markets down a few notches as of a few minutes ago, although not widely regarded as particularly important. (Mystery, indeed). Markets are still clinging on to roughly half-percentage gains for equities and the euro is parked above US$1.3140 for the time being. Still, tomorrow will be a flurry of data as well, with GDP revisions + current account out of Japan, Australian employment, German industrial production, BOE, ECB and RBOC interest rate decisions, and US unemployment data, which of course comes the day before the nonfarm payrolls are out again.
And Greece PSI bond swaps, in case you forgot.
still, the market is up, so if the data continues coming in fairly well, this HSI candle could be a false one, but I am wary, and Greek PSI in particular might throw wrenches into the plans and make it oddly prescient. Short on tops?