I was surprised when i saw the Hang Seng chart when compared to the STI chart that was posted earlier. HSI had already revealed major signs of weakness on Nov 29 2010 circled in oval. The rally was checked three days later and it lacked of strength to go higher. Simply put it, the rally was mostly short coverings and the big operators are cashing in profits. HSI is expected to continue to resume downwards until further evidence of real buying appears.
On the other hand, see the big oval circle. That's what real buying looks like and i managed to detect it when it happened during the May period. The strong rally from May is what i call a panic public slaughtering process and the transfer of shares from the hands of weak holders to strong holders. During that period, the market was in a liquidation mode where any rally was almost short lived and the moment HSI broked the 19431 support, the public thought that the market would continue to trend lower and panicking took place that caused the public to start liquidating their holdings. This is an elusive maneuver designed by the big operators where their real intention is to buy instead of sell more. If you ask how i know, i will say start learning to read the market bar by bar and understanding what the big boys are thinking, you will then gain extra knowledge and new understanding. Of course, sometimes i will go wrong, but so far, my understanding had never failed me.
I am constantly learning, challenged and gaining new knowledge as i practice reading charts everyday. I feel that knowledge has to be improved, challenged, and increased constantly, or it vanishes.
Ronald K
