I last wrote about the World Market Index on August 30.
Since then, price did retest (and break above) the 1950 major resistance level to make a new three-year high, as shown on the Daily chart below. It closed just above that level on Friday.
Notwithstanding this year's push higher (once it broke above above the prior year's congestion zone), the RSI, MACD, and PMO technical indicators have failed to make a series of higher swing highs since mid-May...suggesting that market enthusiasm is waning in world markets, in general.
From the following Year-to-date percentages gained/lost graphs, you can see, at a glance, which major world markets are leading and which are lagging.
Of particular note, in terms of weakness, so far this year, Canada, London, Australia, Japan, Ireland, Russia, China, and the U.S. Russell 2000 Index lead the pack.
We'll see if those laggards begin to gain support soon, and whether the leaders continue to make gains to, ultimately, cause higher swing highs on the above-referenced technical indicators, if we see a retest of the next resistance level of 2000 on the World Market Index. If so, we may see world markets gain strength to push even higher to new five-year highs.
No doubt, world traders will be interested in the Fed's economic forecast and the Chair press conference following this Wednesday's interest rate decision, along with the results of their subsequent meetings in November and December...so, we'll see whether world markets react significantly, one way or other, this week, or not.
The GBP/USD Forex pair has rallied to the underside of major price resistance, as shown on the Monthly chart below.
Watch for a breakout (and hold) above the current level, accompanied by a continued rise in the Momentum and Rate-of-change indicators, to confirm that a further rally is sustainable in the face of ongoing Brexit negotiations.
It's all about the Technology and Healthcare sectors this year, in terms of gains made, so far, as shown on the following 1-year charts and year-to-date graphs of the Major Indices and 9 Major Sectors.
The laggard, Energy, may be poised for a recovery, if it can hold above its downtrending 50-day moving average.
The Materials sector is on the verge of new breakout. Keep an eye on GOLD and Gold MinersETF, as I've recently described here and here.
The Russell 2000 Index is still mired in a large-scale sideways consolidation zone. Watch for any breakout (and sustained hold) above this zone as a potential signal of renewed and serious riskier asset-buying in the markets, in general.
Traders may be influenced by the upcoming interest rate decision and press conference by the Fed on September 20, so these indices and ETFs may drift until then. If the Fed hikes rates, watch for any renewed and serious buying in the Financial sector (see my latest article on XLF here), as well as a sustained breakout and hold above its 50-day moving average and large sideways consolidation zone. And, furthermore, just a final comment on currencies in this regard...watch for any renewed buying in the U.S. Dollar, which has been battered this year, leading up to and following the Fed meeting, in anticipation, potentially, of a rate hike...we may see it retest the 50-day moving average before it, either, renews its downtrend, or continues a rally.
Price on three top Insurance ETFs has been dropping since mid-August, as shown on the following Daily charts of IAK, KBWP and KIE. In the process, theymade some extreme lower swing lows on each of their respective three technical indicators, suggesting that further weakness lies ahead.
As of Friday's close, they are trading around their 200-day moving averages, so failure to regain an upward bias from that level could spell further sharp drops for these ETFs. Watch for any major volume spikes on further weakness to indicate possible panic selling. In the short term, we may, first, see a retest of their 50-day moving average (possible "Dead Cat Bounce") before the next leg down occurs.
Price on the following GDX Monthly chart is currently being squeezed in between major resistance of a 23.6% Fib retracement level and a recent breakout above a long-term downtrend line.
We'll see if it continues to rally -- maybe to 30.00 or even 33.00 -- but there is a lot of overhead price supply, so that could be quite a long shot. I'd like to see Money Flow firm up on any further advancement, as that indicator is currently in downtrend on this longer timeframe.
In the shorter term, price is now under the bullish influence of a new Golden Cross moving average formation, as shown on the following Daily chart, along with rising RSI, MACD and PMO indicators, so I'd watch for a retest of a potential reverse Head & Shoulders neckline at 30.00.
Price on GDX has been advancing along with that of GOLD, as it also approaches its neckline of a reverse Head & Shoulders formation at 1376, as I described in my post of August 28. On Friday, GOLD made a high of 1362.40 and closed at 1351.20.
So, these are two to watch to see if they continue to gather strength, or not, in the coming days/weeks.
I last wrote about the Financial ETF (XLF) on July 11th.
Since then, it failed to hold a brief breakout above the 25.00 major resistance level (convergence of 40% Fib retracement and upper channel), as shown on the following Monthly chart.
Price is sitting at the bottom of the upper quarter of a long-term uptrending channel...a segment that it hasn't typically remained in for very long, or ventured above, since it began its long ascent from its 2009 lows after the financial crisis.
Major support sits around 20.00 (confluence of 60% Fib retracement and price level) and could be a downside target if price breaks and holds below near-term price support of 23.00, as shown on the following Daily chart. So far this year, downtrending RSI, MACD, PMO, and volumes have not provided the support needed for a sustained push higher.
The Technology ETF (XLK) is close to forming a "SELL" signal. Two of the three technical indicators on the Daily chart below have done so, as of Friday's close, while the RSI threatens to join the MACD and PMO if it crosses below the 50 level. Price action this week, following its all-time high made last Friday, has been overly bearish.
Watch for a potential retest of the 50-day moving average around 57.00, or lower to, even, the 200 MA around 53.00, on signs of escalating weakness.
Furthermore, there has been an erosion in the percentage of stocks above a variety of moving averages in the Nasdaq 100 Index, since I last reported on this data a week ago here, as shown on the following tables.
The rest of the Major Indices shown have also faced a reduction, with the exception of the Dow Transports and Dow Utilities Indices, and, to a lesser extent, the Dow 30 Index, which have firmed up a bit...indicating that market participants shed riskier asset-buying in favour of less risk this week.
Russia is the big gainer, so far, today, as shown on the following Heat Map of the World Stock Markets.
The Russian Index has broken above its long-term apex around 1080, but is still below its downtrend line, as shown on the Monthly chart below...we'll see if it holds in the days/weeks ahead.
The momentum and rate of change indicators are still depressed, so I'd need to see a new swing high made above the highs of 2016 on a trendline breakout to confirm any sustained rally, especially above major resistance at 1200.
Momentum, money flow, and rate of change have been in downtrend since April of 2016, and have been especially depressed since June of this year, as shown on the following Weekly chart of Equifax (EFX).
The stock is down by 6.2% in after-hours trading tonight at 124.00 (horizontal red line in above chart), according to this Bloomberg tweet and report...
Its after-hours price of 124.00 puts it below its long-term uptrend line and the 50-week moving average of 131.50...a hold below that price, together with sharp drops in the above three technical indicators, could see price tumble further to, potentially, the 200 MA at 103.00.