"Ominous Shades Of 1987" - HSBC Shows Why 17,992 Is The World's Most Important Number

With Saudi devaluation bets soaring, Chinese money-market rates popping, 2 debates and an election looming, and the most systemically dangerous bank in the world flashes the reddest of red warning signs, HSBC's Murray Gunn's conclusion bears paying attention to. Between wave-trending signals and disturbing technical trading patterns, Gunn warns of "ominous shades of 1987" for the markets.

The Dow Jones Industrials index has turned lower from a Head & Shoulders neckline re-test. A similar pattern occurred at this, often bearish, time of the year in 1987 before the index fell dramatically.

 

With other technical analysis evidence pointing to a potential significant top, the price action should be monitored closely over the next couple of weeks.

 

Pressure eases above 18,449 but a close in the Dow below 17,992 would be a clear warning that a steep fall could be underway.

 

Source: Bloomberg, HSBC