Wednesday 27 September 2017


This analysis has been further updated on Oct 9, 2017.

Hi Traders,

Dark storm clouds are gathering over the Hang Seng Index (now at 28,324) which just completed the whole set of Elliott Waves up. The HSI could start soon a sharp correction. First target around 26,000.


The monthly chart shows that the HSI started a huge wave 4 at the end of Sept 2004. This wave is usually made of 3 legs (a-b-c). The first two (wave a and wave b) are now fully deployed. Wave c downwards is on the making right now. Unfortunately, it can be a catastrophic correction. 

Note the possible  incoming targets around 26,000.

The weekly chart shows the double top that confirms an imminent reversal. Usually, the incoming wave c is a sharp downtrend made out of 5 waves. 

The daily chart reveals 9 waves up which are equivalent to a regular set of 5 waves up. Ralph Elliott used to label 9 waves wherever the correct labeling was  too hard.

The 4-hour and the 1-hour charts show two exhaustion gaps and the start of the new downtrend.

Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge

1-hour chart, click to enlarge

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