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).

Confirmation of the bear rebound forecast

The author has made a daring forecast that the index of the world stock markets will have an extensive rebound beyond the expectation of most market commentators at the time (Dec.4, 2008 ). That forecast was made before the technical signals were confirmed (ie. penetrating the neck line of the head and shoulder formation), so as to give investors an early hint, but at significant risk of the author's reputation.

The head and shoulder or double bottom formations of DJIA, NASDAQ, HSI, NKY, UKX, DAX, and CAC did proceed starting from Oct., 2008, but moving slowly and stagnently sideward for 6 months till the begining of April, 2009. The markets finally gather some upward momentum after such a long rest, and penetrated the fan lines and neck lines (NL) upside, resulting in a confirmation of the technical analysis patterns. See the chart of DJIA (fig. 1), and the chart of HSI (fig. 2 ).

The gauge from the chart patterns has not change (Dec. 4, 2008 ), but because the neck lines of the head and shoulder formations are tilting downward, so the target of rise is some what reduced. On the other hand, because the upward penetration of the neck line give a confirmation of the bull swing, and signals that we are slightly above the mid way of the up swing.

The author still believe that after this bear II corrective up swing, although may reach a level much higher than most people expected during Dec. 4, 2008, it will drop back down extensively afterwards as stated in the last article. The author still believes that bear III down swing will come, therefore this rebound should be a good opportunity for escape for those still got traped, as well as some speculative buying.

Because all the major world markets produced such a classical head and shoulder or double bottom formation, and last for six months, there are some possibility that it signal the final bear bottom, as illustrated by a nine months head and shoulder bottom of the DJIA between June,2002-March, 2003. However, because this business cycle is more serious then last time. To play safe, the author still treat the past low point as the bear II low, and expect another even lower bear III to come between this coming fall to next spring. If the down swing of bear III do not exceed the low level of bear II by the spring of 2010, then one can consider that the bull has finally arrived.