As the eyes of the world are on Russia and Ukraine (and Putin versus Biden), what happens next in the Chinese markets could be a big deal as well!

The Chinese economy has the ability to tip the scales of the global economy and one of its leading indicators is flashing a warning sign. The Hang Seng (Chinese stock market index)

Today’s chart takes a long-term “monthly” look at one of the most important stock market indices in the world.

As you can see, the index has spent the past 5 years forming a bearish descending triangle with dual support at (1) – both the bottom of the triangle and long-term uptrend line.

If support at (1) fails to hold, then a measured move may be in play. In this case, a measured move suggests the index could decline to (2), or the 16,000 area, which is over 30% below current trading levels.

Looks like this is an important test of support for China, as well as the world. Stay tuned!

(Click on image to enlarge)