Is the Hang Seng China Enterprises Index approaching a low?

I love fold backs

Introduction

The Hang Seng China Enterprises Index (HKSE) consists of the top 30 Chinese companies. Alibaba companies and JD.com are well known companies for many in the World. Since the high on November 1st 2007, this index has made lower highs and lower lows and traded almost sideways for almost 15 years. Fifteen years is half of a Saturn cycle. Also stocks normally make a change in trend every 5 years. As Saturn is also known as father time the question raises is the Index about to turn?

Hang Seng China Enterprises Index (HKSE)

When analysing this index, I started with a monthly chart (as shown below) and I looked for dominant cycles. There seems to be a persistent 23 months cycle, which is half of the 4.5-year cycle which is a dominant cycle in the Hang Seng.

When I was further looking into what cycle may be the cause of it, I found that the Hang Seng index made a top in November 1st 2007 when Mars was at 101°5. On the low of October 27th 2008, the index made a low when Mars was 225° degree from top 2007 at half the Mars cycle. The market made a change in trend and on September 12th Mars 2009 Mars was again at the 101° hotspot, as if the market was drawn to that hotspot. The market did not turn immediately, but 360° Mars further the Hang Seng index was on the low of August 2011 and Mars had travelled 720° from top.

Nearly 4 cycles of Mars from top 2007, the Index made a high again on May 26th 2015 and shortly the trend turned and the market made a low when Mars hit the hotspot of 101° again on July 8th 2015.

Since 2015 until today the Hang Seng Index seems to mirror the earlier market behavior from 2007 towards 2015. If the Hang Seng continues to do so we might expect to have a high again around March/April 2023. Then this will be on the 8th revolutions of Mars(8x360°) since the high in 2007 and about 1 month before April 16th 2023 when Mars will be again at the 101° hotspot.

Conclusion

The possible foldback of the Hang Seng Index since 2015 is interesting to watch. As shown on the chart his index might find a bottom soon from now. This can be as early as early February 2022 or late in April 2022 (or not at all)

As always there is no guarantee that the cycle will turn in this timeframe and that the fold back will continue to be in play. Cycles can contract, extend and invert. There is also no guarantee that this index will rocket to the all-time high again of 2007. At some point the fold back will cease to work any further.

So, be careful and watch the chart in front of you.

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