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* If the dots don't connect, gather more dots until they do...or, just follow the $$$...





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Monday, March 14, 2022

China's Hang Seng Index Plunges Below Major Support...President Xi's Legacy Hangs In The Balance

* See UPDATES below...

Selling has acceletated to an all-time extreme level -- even exceeding that which occurred during the 2008/09 financial crisis -- in China's Hang Seng Futures Index (HK50), which has plunged below a major support level of 20,000 in Sunday night's wild trading, as shown on the following monthly chart (the price is still dropping as I write this post).

This follows my post of March 7, which warned of possible impending weakness in China's Shanghai Index (SSEC) due to diverging extreme weakness in its Financials ETF, GXC.

Failure to recapture and hold above 20,000 could see a swift plunge to 16,000, or lower.

The following article describes 11 major crises that China is facing, which may have contributed to its 4.3%+ drop, so far, from Friday's close.

N.B. The Hang Seng Index closed at 19,531.66 on Monday for a loss of 5.0% from Friday. As well, China's Hang Seng Tech Index lost 11%, the most ever...the Hang Seng China Enterprise Index lost 7.2%, the most since November 2008...and the Golden Dragon China Index lost 13%, for a two-day loss of nearly 30%...see this ZeroHedge report for details.


  • Perhaps President Xi will rethink his recent no-limits alliance with Russian President Putin -- due to Putin's new-found status as the "world's pariah" and the indiscriminate slaughter of innocent women and children and the war crimes he's committing in his barbaric war on Ukraine (moving ever closer to NATO neighbouring countries, in the process) -- and reconsider whether he, either, wishes China to remain a viable trading partner (and become more stable and trustworthy in the process) and attract foreign investment from the West, or risk losing that privilege altogether.
  • Either the world moves backward into fractured, unstable, waring, and bloody medieval times, dominated by unending depressions, famines and disease...or it moves into the 21st Century with grace and stability...or, it is obliterated by world-wide nuclear war.
  • President Xi has a big part to play in that decision.
  • Either way, he will be held responsible...and his legacy (and, by extension, China's) will reflect that choice, which he'll need to make, sooner rather than later.

N.B. The nuclear "Doomsday Clock" is ticking...and is now at "100 seconds to midnight," as noted in the following report...thereby, making President Xi's decisions that much more critical and urgent.

ZeroHedge excerpt

ZeroHedge excerpt

* UPDATE March 15...

Selling accelerated in overnight trading in China, as shown on the following monthly chart of the Hang Seng Index (HK50). It closed at 18,415.08 and lost another 5.72%. It was another bloodbath in Chinese major indices, as shown in the following table.

I've shown the chart in an "area" format to illustrate that any gains made since November 2006 have never held, to date...hinting that there has been something systemically wrong in China and its economy since then -- in the months leading up to the 2008/09 financial crisis and global market crash, and ever since -- and signalling that, what was wrong/broken, then, has never been fixed.

SO, if President Xi thinks that, by hitching up China's wagon to Putin's horse will make that situation any better, then I've got a bridge to sell him! 😕

More information on China's markets can be found in the following ZeroHedge article...it's not pretty.

* UPDATE July 18...

More trouble ahead for China...this time, it's their housing market...

* UPDATE July 25...

With investors pulling their money out of China on a scale second in size to the COVID crash, there is a "threat of a further disintegration of their financial system should their housing crash escalate further"...

* UPDATE July 31...

Tensions are heating up between the U.S. and China to dangerous levels...adding to an already-risky foreign investment environment in China...

* UPDATE August 6...

Oh, look...a military distraction is being conducted by China, while its Shanghai Index (SSEC) and Financial ETF (GXC) are poised to plunge below near-term fragile support, as shown on the monthly charts below.

The SSEC has had difficulty holding above 2500 since November 2006. Near-term support sits at 3000, while longer-term major support lies at 2000.

Near-term support for GXC sits at 80.00, while longer-term major support lies at 60.00.

A drop and hold below 3000 for the SSEC and 80.00 for GXC could send China's markets plummeting in short order.

* UPDATE Aug. 8...

The growing global threats posed by China -- militarily, economically, financially, ecologically, environmentally, human rights abuses, global supply chain disruptions/blockades, etc. -- are described and discussed in detail in the following Life, Liberty & Levin video...

N.B. Further UPDATES can be found here.