As a technical analyst my job isn't to focus on fundamentals or to look into a crystal ball to determine which fundamental catalysts might be just around the corner. Rather, it is to analyze price action and figure out what the market may be signalling could happen. More importantly, it is to accurately gauge risk and to identify the most attractive risk-adjusted market entry and exit points.

There is a lot of talk about an enormous property bubble in China and the risk of a military confrontation between South Korea and North Korea. While it is impossible to know how these situations will unfold, we can look to the charts to get an indication of how these markets are beginning to behave with the aforementioned storm clouds on the horizon - and the charts are beginning to not paint a pretty picture:

Click to enlarge

Shanghai Composite

Shanghai_Composite_Daily_3.15.2013

South Korea

EWY_Weekly_3.15.2013

These charts don't look great and offer many more questions than they do answers. Why are two of the most important Asian markets showing strong signs of rolling over while the US makes new all-time highs each day?

In addition, many economically sensitive sectors such as materials & mining have been performing poorly in recent months (CAT, CLF, FCX, etc. to name a few). These are early warning signs that all might not be well in the land of the pandas. With US equity markets at all-time highs investors may want to pay extra attention to Asian markets, and China in particular, over the coming weeks.