Global equity markets have come under heavy volatility this year, with leading markets like the US, China, and Europe declining swiftly.
China’s Hang Seng index, in particular, has sounded alarm bells, and we have been highlighting the importance of its bearish pattern for several months. You can read our latest on the topic here.
Today, we look at a monthly chart of Hang Seng to provide an update.
As you can see, the Hang Seng index broke its 30-year trend line support at (1). This was when we first began warning investors of a deeper selloff.
Selling has accelerated since the breakdown in what appears to be a waterfall move. The next support comes into play at 12,500, which is well below current prices.
This doesn’t bode well for Chinese stocks or the broader global equities market. In my humble opinion, investors should take note of this — it is worrisome that the largest country in the world is breaking down. Stay tuned.