《Thoughts and Considerations》The market is about to enter the fourth quarter of 2026; it may be worthwhile to briefly look back. This year, the market pattern remains temporarily high first and then low. The Hang Seng Index has temporarily dropped from its peak of 28,056 points on January 29 to its low of 22,518 points on June 26, meaning the index's range this year is only 5,538 points so far. Judging from the trend, the Hang Seng Index's range this year is indeed relatively narrow. Let us compare it with the market ranges of the past two years. In 2024, the Hang Seng Index rose from a low of 14,794 points on January 22 to a high of 23,241 points on October 7, resulting in a yearly range increase of 8,447 points. In 2025, the Hang Seng Index rose from a low of 18,671 points on January 13 to a high of 27,381 points on October 2, resulting in a yearly range increase of 8,710 points. From the above data, it can be seen that the Hang Seng Index's range in 2026 has temporarily decreased by 5,538 points, which is indeed relatively narrow. Therefore, when the market enters the fourth quarter of this year, if a black swan event occurs, the market will not only repeatedly test its bottom, but technically may further seek a new low.
*Entering Phase 2 of a bull market correction, with a relatively mild decline*
As mentioned above, the market in 2024 and 2025 was both low first and then high, which technically only belongs to Phase 1 of a bull market. The Hang Seng Index's upward trend, starting from the low of 14,794 points on January 22, 2024, continued under constant fund inflows until reaching the peak of 28,056 points on January 29, 2026, when it gradually became constrained. That is, after a continuous 24-month upward trend, the Hang Seng Index accumulated a total gain of 13,262 points. Subsequently, the market began to correct. Under selling pressure, not only did a clear pullback occur, but the market continued to fall sharply until it reached the low of 22,518 points on June 26 before showing signs of stabilizing. That is, the Hang Seng Index has corrected by 5,538 points. From a technical standpoint alone, the market should have already entered the adjustment phase of bull market Phase 2. Compared to the Phase 1 bull market gain of 13,262 points, the Hang Seng Index has already corrected 41% of the gain. Judging solely by the decline, it can be considered relatively mild.
*Moving average lines arranged in reverse order, unfavorable for short-term market outlook*
Narrowing the view, August's market was high first and then low. The Hang Seng Index dropped from a high of 26,187 points on August 4 to a low of 25,089 points on August 14, resulting in a monthly range decline of 1,098 points. In September, the market maintained a weak pattern of being high first and then low. The Hang Seng Index temporarily dropped from a high of 25,791 points on September 4 to a low of 24,275 points on September 25, resulting in a monthly range decline of 1,516 points. Moreover, as the market's downward trend continues, the Hang Seng Index has now broken below all sets of moving averages, and the arrangement of the moving averages has even formed a reverse order. Currently, from top to bottom, they are the 250-day line (around 25,683 points), the 50-day line (around 25,303 points), the 100-day line (around 24,994 points), the 20-day line (around 24,911 points), and the 10-day line (around 24,728 points). Judging solely from this arrangement, it indicates that the market's volatility is unlikely to change in the short term. In terms of pattern, it is indeed quite unfavorable for the short-term market outlook. Therefore, under persistently uncertain market conditions, investors are best advised to conserve their strength as much as possible. As for any speculative short-term trading activities, avoid being overly hasty or aggressive, and proper risk management must be implemented.
*Articles published in Economic Times, whether signed or unsigned, represent the personal opinions of the authors and do not represent the stance of Economic Times. The role of Economic Times is to provide a free platform for expression.
*Entering Phase 2 of a bull market correction, with a relatively mild decline*
As mentioned above, the market in 2024 and 2025 was both low first and then high, which technically only belongs to Phase 1 of a bull market. The Hang Seng Index's upward trend, starting from the low of 14,794 points on January 22, 2024, continued under constant fund inflows until reaching the peak of 28,056 points on January 29, 2026, when it gradually became constrained. That is, after a continuous 24-month upward trend, the Hang Seng Index accumulated a total gain of 13,262 points. Subsequently, the market began to correct. Under selling pressure, not only did a clear pullback occur, but the market continued to fall sharply until it reached the low of 22,518 points on June 26 before showing signs of stabilizing. That is, the Hang Seng Index has corrected by 5,538 points. From a technical standpoint alone, the market should have already entered the adjustment phase of bull market Phase 2. Compared to the Phase 1 bull market gain of 13,262 points, the Hang Seng Index has already corrected 41% of the gain. Judging solely by the decline, it can be considered relatively mild.
*Moving average lines arranged in reverse order, unfavorable for short-term market outlook*
Narrowing the view, August's market was high first and then low. The Hang Seng Index dropped from a high of 26,187 points on August 4 to a low of 25,089 points on August 14, resulting in a monthly range decline of 1,098 points. In September, the market maintained a weak pattern of being high first and then low. The Hang Seng Index temporarily dropped from a high of 25,791 points on September 4 to a low of 24,275 points on September 25, resulting in a monthly range decline of 1,516 points. Moreover, as the market's downward trend continues, the Hang Seng Index has now broken below all sets of moving averages, and the arrangement of the moving averages has even formed a reverse order. Currently, from top to bottom, they are the 250-day line (around 25,683 points), the 50-day line (around 25,303 points), the 100-day line (around 24,994 points), the 20-day line (around 24,911 points), and the 10-day line (around 24,728 points). Judging solely from this arrangement, it indicates that the market's volatility is unlikely to change in the short term. In terms of pattern, it is indeed quite unfavorable for the short-term market outlook. Therefore, under persistently uncertain market conditions, investors are best advised to conserve their strength as much as possible. As for any speculative short-term trading activities, avoid being overly hasty or aggressive, and proper risk management must be implemented.
*Articles published in Economic Times, whether signed or unsigned, represent the personal opinions of the authors and do not represent the stance of Economic Times. The role of Economic Times is to provide a free platform for expression.
