OK, sorry, I guess that was a little dramatic. Anyway, the major indexes of many foreign countries staged outstanding advances, in some cases since the end of 2015. And while it was undoubtedly a great ride, the nagging question all along the way was, “what happens when these markets start to hit resistance?” The answer appears to be forming as I type. So it is an important time to pay attention to how things play now, as that may have important implications going forward.
Figure 1 displays four separate indexes that I created and follow – The Americas, Asia/Pacific, Europe and the Middle East.
(click to enlarge)
Figure 1 – The Four Major World Market Arenas (Courtesy AIQ TradingExpert)
The Americas (upper left) didn’t quite make it to its old all-time before running out of steam. Asia/Pacific (upper right) broke out to the upside for exactly one week before dipping back below resistance. It presently stands right on the edge (see Figure 2 below).
Figure 2 – Asia/Pacific fails its first test (Courtesy AIQ TradingExpert)
Europe (lower left) also broke out above its 2014 high for exactly one week before falling back (See Figure 3 below).
Figure 3 – Europe also fails its first test (Courtesy AIQ TradingExpert)
My Middle East index bumped its head at a somewhat arbitrarily drawn inflection point.
Figure 4 – A key resistance point hanging over Middle East index (Courtesy AIQ TradingExpert)
Summary
So in sum, the “world” stock markets are sort of in a “Hey nice work, what have you done for me lately?” situation. While I would love to tell you how this will all play out unfortunately I do not possess the ability to do so.
One thing I do know, however, is that the implications are large. If the “world markets” by and large break out to the upside and stage another up leg then the “bull is alive”. On the other hand, if resistance holds and the majority of markets start to break down, things could get very ugly.
As the world turns…
Jay Kaeppel
Disclaimer: The data presented herein were obtained from various third-party sources. While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
