This week, I feel, is going to be one that sets into stone harsh realities that many felt were not only behind us, but were never to be witnessed again in their lifetime. And no, I’m not talking directly to the machinations as a result from Ukraine. I’m talking directly about the entirety of the system we colloquially refer to as “markets.”
There’s a lot to unpack in that statement and I’ll be doing just that and more on today’s show. However, what I want to draw your attention to, as of now, is something I’ve been detailing taking place on the other side of the globe that will, repeat, will have enormous impact on all of us, with immediacy, should it happen. Here’s what I’m referring to…
The possibility for the sudden accidental detonation of a financial “nuclear” bomb is now a very real possibility. I’ve been warning using the Nikkei as of late, but now China has moved into view. Hint: and it ain’t good.
Below is a chart of the Hang Seng using weekly intervals, think of it as China’s S&P or Dow for example purposes. What I want to draw your attention to are the notations I’ve added and why. To wit:
The first line is the long one going back to 1990 to where we are currently. It’s the equivalent from a technical analysis perspective of: a line that must not be crossed or sh#t’s gonna get real, real fast.
What I also want to draw your attention to is the smaller level one that crosses through the small box and joins the longer. That box represents the low point in 2015 when suddenly the world was on edge because “limit down” scenarios were a daily worry (because we had them!) after said “world” realized what happened across the globe in one financial market could suddenly shut down the others almost as fast as it takes to order a latte at a Starbucks™.
China’s markets are currently in free-fall mode. If they continue and were to reach that circle I highlighted? All bets are off, for the ramifications will reverberate everywhere and together with immediacy.
That’s where we currently are, as I see it.
© 2022 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.