Barton's Asian Stock Market Charts .......................................................................................................................... Disclaimer ; Glossary
Hang Seng Index Historical Tops
15 October 2007
Now you can give something back by donating to this site.
Please follow this
link to read our donation suggestions:

We can also see that there were three teasers: tops that didn't reverse the trend. These were in 1992, early 1997 and 1999.
We can also see that in the case of the top of 1997, the index fell more than 25% before we got a clear indication of a trend reversal. Such a fall can wipe out all of one's profit and even put one into loss. PE on our monthly chart didn't even reach 20. So we had one rather tricky reversal situation whereby it might have been difficult to exit with profit. But it certainly wasn't too late to exit without major loss. That was a bear market that saw the index lose more than half of its value in eighteen months. The top was helpful, albeit not as helpful as it could be.
Conclusion: Barring the sky-falling case of October 1987, we could expect that we will get some indication of a top when the current trend reverses. In the case of a strong bull trend, such as the present one, we are likely to see extensive volatility marking the top. We can see great volatility now. But it's too early to jump ship now. There are no signs of a top at all. On the other hand, given the meteoric rise of the past eight weeks, it's time to keep an eye open for danger signals.
Click on Lulu to go to the farm
|