Is The Chinese Market About To Decline 30%?
Hang Seng Monthly Chart,
As the eyes of the world are on Russia and Ukraine (and Vladimir Putin versus Joe Biden), what happens next in the Chinese markets could be a big deal as well.
The Chinese economy has the ability to tip the scales of the global economy, and one of its leading indicators is flashing a warning sign: The (Chinese stock market index).
Today’s chart takes a long-term monthly look at one of the most important stock market indices in the world.
As you can see, the index has spent the past five years forming a bearish descending triangle with dual support at (1) – both the bottom of the triangle and long-term uptrend line.
If support at (1) fails to hold, then a measured move may be in play. In this case, a measured move suggests the index could decline to (2), or the 16,000 area, which is more than 30% below current trading levels.
Looks like this is an important test of support for China, as well as the world. Stay tuned.
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