HKHSI and NASDAQ Downturn (5/5/2000)

Major Correction in the Horizon (4/15/2000)

Prof. Kai Keung Mark is a retired professor, Dept. of Biology, The Chinese University of Hong Kong and Dept. Head and Principal Lecturer, Dept. of Science, Hong Kong Institute of Education. He has three biotechnology patents. He uses his understanding of high technology to forecast market movements . He has published 13 articles in Financial Trend, and leading Hong Kong stock analysis journal plus many other Mark's letters since 1987. His prediction reliability rate reached 80%. He accurately predicted the October crash (10/18/87), the bottom level of 1990(3/5/90), the peak level of 1994 (5/11/92), the peak level of 1997 (2/12/96), the peak level of 2,000 (8/22/99), the peak in March 2000 (2/20/2000), the bottom in September, 2001, the US bottom in 2003 (5/28/2003), the HK bottom in 2003 (6/13/2003), the US peak in 2007 (11/14/2007), and the HK peak in 2007 (1/9/2008).

Another buy opportunity coming

In my May 28,2003 article, I made a bold recommendation, saying that it is time to "BUY" Hong Kong stocks. In most stock analysis articles, authors frequently made conditional recommendations that are difficult to execute. This is so because most authors do not have the confidence to link one's reputation with one's recommendations. I did so on the May 28 article because the outlook is very clear to me, so I have the confidence to put my reputation on a clear recommendation. Although I made a daring statement before any one else did, and proven to be an excellent advise, but few investors would dare to get into Hong Kong market at that time, while large capital is now getting into the Hong Kong market in the last few weeks as reflected by the very high trading volume, and the market is over bought. Now DJIA has broken its wedge formation, and fan line II down side (see fig. 1), implying that a decent correction is coming. The down side limit of this correction would be the neck line (NL) which is around 8,600. In my May 28 article, I suggest that after DJIA has broken the neck line up side, it will come back down and hit the neck line from above. Now this possibility might happen, but as the index has moved up extensively, the kiss good-bye (KG) might happen in his front gate instead of his front door.

In Hong Kong, the HSI is one step behind DJIA for HSI has not completed its head and shoulder bottom formation yet. Now Hong Kong stocks are at a very volatile state with daily trading of around 20 billion HK dollars per day for two days. I read this as an important signal that the Hong Kong stock market is making its final burst off, and speculate that the Hong Kong market will follow the US market for a significant correction. With this speculation, one can draw the neck line (NL) with the current HSI peak of 11,444, and the correction will form the right shoulder (see fig. 2). Because the outlook is very good based on the fundamental factors described in my last June 13,2003 article, the correction may not proceed as low as the left shoulder of 9,000, but it is possible to break the 10,000 point mark. Investors should start buying HK stocks around 10,000 point.

In summary, it should be a very good buy opportunity for US stocks below DJIA of 8,900 and HK stocks around HSI of 10,000, because we are in the first phase of bull market.