Hong Kong's Hang Seng Index is one of the many global markets that plunged in recent months -- it fell more than 20% from its April high. It started to rebound on Aug. 10, yet eight days later, the Hang Seng Index reversed lower again.

Mainstream media outlets tried to find some fundamental explanation for the new downturn -- but they came to some slightly different conclusions (emphasis added):

• "HK Shares End Lower on Worries Over Europe's Debt Problems" -- Wall Street Journal 8/18/11
• "Hong Kong Stocks Decline on US Stimulus Concern..." -- Bloomberg 8/18/11
• "Hong Kong shares shed 1.34%, global growth fears" -- Economic Times, 8/18/11

While the mainstream media unsuccessfully picked their brains for an explanation, readers of EWI's Asian-Pacific Short Term Update didn't need one: They were prepared several days in advance.

Here's how. EWI's Sunday, Aug. 14, Asian-Pacific Short Term Update wrote (emphasis added):

"There is upside potential to the 20,372 - 20,721 area of the intraday Keltner Channel and the 38.2% retracement levels respectively."

Then, after prices rose for two more days as anticipated, the Tuesday, Aug. 16, Asian-Pacific Short Term Update wrote (emphasis added): 

"[The Hang Seng] appears to have topped ... right as prices hit both the 38.2% retracement and the upper intraday Keltner Channel levels. Prices are at a short-term bearish opportunity now..."

One day later, the Hang Seng peaked mid-day just above 20,500 -- right in the middle of editor Chris Carolan's target -- then strongly reversed. Since then, prices have fallen more than 5%, just as The Asian-Pacific Short Term Update anticipated.

How did Chris make this forecast? He didn't need to look at the fundamentals for an answer. The charts told the whole story.

The Elliott Wave Principle's objective set of rules and guidelines told him to look for the rally to end. Plus, each of his supporting technical indicators -- Fibonacci resistance, the Keltner Channel, the Relative Strength Index and the Jurik RSX -- confirmed his wave analysis. In the words of Chris Carolan, "the Hang Seng shows how pretty analysis can be when all our tools work together." (Aug. 18, 2011)

What's next for the Hang Seng and other Asian equities? Put global volatility on your side -- and put 30-year market veteran Chris Carolan to work for you -- with the three-times-per-week Asian-Pacific Short Term Update. Learn more below.

- John W., Australia

The Asian-Pacific Short Term Update gives you in-depth forecasts and analysis, plus detailed Elliott-labeled charts for Hong Kong, Japan, China, India, Australia and more at least three times per week. You'll also get occasional succinct video updates that deliver unique opportunities and teachable lessons to subscribers.

Bonus: Subscribe now and get instant access to Chris' 42-minute online trading course, "3 Technical Indicators to Help You Ride the Elliott Wave Trend" ( $49 value). You'll learn how to get the most out of Chris' favorite technical indicators with detailed charts and real-world examples.

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