In today’s briefing:
- HSCEI Buy Entry Met
- Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.
HSCEI Buy Entry Met
- Our call has centered around buying a dip in HK at HSCEI 5,800 and HSI 17,000 for a final upside drive into December to form at top.
- H shares (our long vehicle) – Met 5,800 long entry. 6,030 is the level to clear and hold above. PT at 6,600 just under the 6,700 MT barrier.
- Macro trend remains down. HSI 19,400 represents an excellent short opportunity for Q1 weakness. December is touted to be a topping/ range ahead of a more bearish Q1.
Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.
- Since early-October we have discussed our expectation for a bear rally, targeting the 200-day MAs on the $IWM and $SPX; targets were hit (within 0.5% of hitting on SPX).
- We are now seeing short-term uptrend breaks on the IWM and the DJIA; this is a good time to get defensive and/or take profits, as the 1.5-month rally appears over.
- We expect more weakness in the weeks ahead, and we cannot rule out another test of the 2022 lows.
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