Chinese Stocks Just Broke A 35-Year Support Line
The Hang Seng Index of late has broken below support line (1) in the chart below. This support line has been in play for the past 35-years. The Power of the Pattern is of the opinion that a key kiss of resistance could be in play and what takes place from here, could well impact markets globally.
The Hang Seng and the S&P 500 peaked together in 2007 and might have done the same again this year at (2). They also hit key lows together in 2009, as the Hang Seng index was hitting support line (1).
Of late the Hang Seng index has broken 35-year support and is now kissing the underside of this line at (3) above.
From a Power of the Pattern perspective, until the Hang Seng gets above this resistance line and the S&P 500 takes out the 2,150 level, one might want to be under-weighted in broad markets.
We humbly feel what takes place on the “underside” of resistance at (3) above, could become very important for this index and markets in the states.
This was originally shared on Kimble Charting Solutions.
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