Update on Hang Seng — 🤯
ATEC admits that Hang Seng continues to confuse and frustrate.
Post yesterday and depending on today’s price action, the potential for a previously bullish setup is now diminishing should more weakness prevail.
That this is likely stems from the continued weakness in the Chinese titans, with the likes of Baba, Bili and Baidu selling off impulsively on the back of weaker earnings. Hence the previous idea that sellers’ exhaustion might have already kicked in was clearly wrong.
If this is the case, then ATEC has to consider an alternative scenario as shown:
Where we previously alluded to the possibility of a reverse ‘head and shoulders’ forming, the index is now potentially forming a consolidation triangle.
In the land of Elliot, triangles often precede the final move — in this case, a final thrust down. Hence should the 24,800 level (ballpark) be broken from here, this will be the core scenario.
ATEC is not able to estimate with certainty where the index might land in this scenario. A convenient target could perhaps be the vicinity of 2020 lows. For now, we have to accept that our positioning was wrong and step back to watch.
Good luck out there.