It seems like there is no bottom to this market. If it continues to drop 1000 points every day, then the HSI will be back to zero in two weeks! Today, Hong Kong shares dropped 12.7% — it is the biggest drop since 1997. At one point the index dropped more than 16% and it would be the biggest drop since 1989.
A few possible reasons for this big drop:
i) continual selling by hedge funds and financial institutions due to deleveraging and redemption
ii) panic selling by investors
iii) loss cut due to margin calls
Even though it seems as if there is no support level, I do believe that we are getting very close to the bottom… I believe there will be good buying opportunities soon…
