China Breaks 35-Year Support
Chris Kimble | Dec 30, 2015 03:48PM ET
The Hang Seng index has broken below support line (1) in the chart below. That support 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 that 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 was hitting support line (1).
Lately, the index has broken 35-year support and is now kissing the underside of the line at (3) above.
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-weight the broader markets.
We believe that what takes place on the “underside” of resistance at (3) above could become very important for both the Hang Seng and the U.S. markets.
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