Hang Seng Index Cracking?

Here’s another interesting twist in the financial order.

We’re constantly exposed to negative headlines and stories about the US, UK and Western economies. About weakness, recession and woe. And, indeed there’s plenty of bad news to go around without a doubt.

But, I’m drawn to what I don’t read about but actually ‘see’ taking place in the markets of the world.

Markets, whether bond, stock or commodities market, are where money is put to work.

For a while it was Real Estate that was over- heated to a red-hot lava bubble which naturally burst.

Now, many tell us that Asia is our savior and that that is where the future of investing will be.

That is probably true over the long-term, but, in the short-term investment money can be quickly gobbled up by naive new investors in the Asian markets.

Just as I noted that non-US currencies were starting to weaken (British Pound, Australian Dollar, Euro, etc.), now, I’m starting to ‘see’ the beginnings of another surprise coming from the Hang Seng Market Index for Chinese stocks.

Observe the beginning of what could soon be big news this week or even overnight.

My interpretation is price that momentum is, for whatever fundamental reason, being choked and weakness, at least shorter term, is taking it’s place in the Hang Seng Market.

Granted the New Year celebrations are still to come in China, but, this is a bit early and seems to indicate that the incoming funds were coming from the Western side of the world and have slowed because of the Holidays here.

Will that be enough slowing to tip things over the edge? There has been some talk of US currency shortages in foreign countries and there no being enough spare dollars to continue buying US Treasuries at the same rate as before.

This slowdown in momentum may first show as a slip into sideways price action.

A sharp down-turn in Asia will likely spread throughout the region and if it starts now, may go largely unnoticed by traders in the West during this Holiday period. Too much partying can divert attentions.

Just when distractions are plentiful is a good time to prepare for surprises though.

Now, having said that, I need to point out that oddly, I presently don’t see this same weakness in the Shanghai Composite.

Yet.

Whether these two markets can diverge is an open question, but, it doesn’t seem likely on the surface.

We’ll just watch and see how this develops.

I could err on this by being too early but, it would align with the other currency surprises we mentioned and give us something to talk about as we begin the New Year.

Thanks for reading. - George

Legal Disclaimer: The content on this site and articles are provided as general information only and should not be taken as investment advice. All information on this site is given for educational purposes only.

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES “INVESTMENT ADVICE” NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, FOREX, BONDS OR FUTURES.

The Money Tigers Group © 2011

Tags: WD Gann, stock market prediction, gold traders
The Excalibur Method, gold price predictions, timing the markets, money tigers, trading education, gold price charts, e mini trading, technical analysis

Post Footer automatically generated by Add Post Footer Plugin for wordpress.