Hang Seng Index recap for 14.01.2016
The massacre in the Chinese stock market continues with full force with almost none effect from the government interventions. With the new year barely starting and lifting of the ban on short stocks, the market dropped 7% in minutes, erasing nearly 500bln dollars. And this was on the 4th of January. 11 days later, nothing good has happened. Gap after gap on every opening on Asia session, plunging deeper and deeper. As Khaleed says: "and another one".
Current situation in China is giving ground for the mass sell-ofs and overflow of capital funds offshore as the Chinese yuan (offshore and onshore) continue to devalue as well. Capital is redirected to safe-heaven - USD and Gold. Gold yesterday was destroyed in the end of the European session, but Asia boosted it up, currently erasing 50% of the losses from yesterday. Good CPI, but overshadowed from worse PPI, low expectation for GDP growth, money supply dropping and new loans decreasing. All catalysts for worsening the situation in China in the long-term. Finally the great Dragon starts to loose altitude and probably it will land hard in 2 or 3 years.
On the technical side - Hang Seng Index is currently at the bottom of the assumed strong buy zone at 19415.78. Maybe the price will find a support there for a short correction towards 20054.54 before slamming to the ground again. A new bottom appears every day. Beware of this if you feel like you are late to the selling, but still want to get in.