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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

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Thursday, March 05, 2015

Major World Market Index Poised for Breakout or Failure?

* NB: See UPDATES below...

The World Market Index will need to recapture the 200-day moving average, as well as the 1900 level, as shown on the following Daily chart. Since it's still under the bearish influences of a moving average Death Cross formation, it's still vulnerable to a retest of the 50-day moving average, or lower, should we see major world markets plunge...a drop and hold below the 50 level on the RSI could point price in that direction.

UPDATE March 15, 2015:

Price has, indeed, declined to retest the 50-day moving average and is now sitting just above a major support level at 1800, as shown on the Daily chart below. A drop and hold below that would have serious implications, not only for foreign markets, but, also, U.S. equity markets. Also, the very recent daily uptrend has now been broken, as price has fallen back into a large sideways trading range. As long as the RSI remains below the 50 level, and the MACD continues to decline, we may very well see this scenario develop. Otherwise, we may see some very volatile swings in both directions over the short term, until a firm breakout from this range in a new direction is confirmed, one way or the other...one to watch closely over the coming days.

UPDATE March 21, 2015:

The following updated chart, as of Friday's close, shows that volatility is still rampant in this index. Price is, once more, poised to break out of this large sideways trading range to the upside. A break and hold above the 1900 level and the 200-day moving average, together with a hold above the 50 level on the RSI should see the bulls re-take control of this index. Otherwise, a fall back into the range will likely result in more volatile and swift swings in favour, ultimately, of the bears, inasmuch as it's still under the bearish influences of a moving average Death Cross formation

UPDATE May 22, 2015:

The following updated chart, as of Thursday's close, shows that price has broken above the 1900 major resistance level, retested it and bounced, after a bullish moving average Golden Cross formed in mid-April.

With all three technical indicators declining in value since the swing high of 1949.91 set on April 27th, we'll need to see price break and hold above that major resistance level, with confirmation of higher highs on the RSI, MACD and Stochastics indicators. Otherwise, we could see a major reversal at what could be considered a right shoulder of a bearish Head and Shoulders formation (with a downward-sloping neckline), that could send world markets tumbling considerably to around the 1600 level, or lower.

P.S. Price closed on May 26th just below the 50 moving average...stay tuned for fireworks...