Chart Book | Chart of the day: Hang Seng's hold gives

Price action in the second quarter of this year now looks like a massive false break above resistance that had held since 2010 at the psychological 25,000 area; massive volume when we first dropped below it attests to its power in investors' minds. The following five weeks were spent trying to hold support at 24,000 and the weekly cloud, as we had predicted. This gave way dramatically last week, Hong Kong hit like so many world class indices, breaking two trend lines and the cloud for the lowest weekly close since May last year. This kicks off the next step in this important correction where we now target the trend line from 2008's low and then the psychological 20,000.