The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) finsihed the week below the important support level at 71 levels. The head and shoulder chart pattern price target stands at 67.75 levels. Both the neckline and the 200-day moving average stands at 71 levels and will act as resistance. Read More
The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O), pulled back from the strong resistance at 74.8 levels. During the week price tested the long-term 200-day average at 71 levels and rebounded. For now we can conclude that the 200-day average acted as support. In the following weeks I will monitor the price action around the average. Failure to hold above 71 levels can result in a larger scale correction. The daily scale price chart can form a short-term H&S top. Both the neckline of the possible H&S top and the 200-day moving average are overlapping at the same level (71). In the short-term, as long as the price remains above 71 support, ACWI ETF is expected to trade between 71 and 74.8 levels.
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Both the iShares MSCI All Country World Index ETF and iShares MSCI Emerging Markets Index ETF are headed towards their February lows. Next few weeks will be important as these two Global equity benchmarks will tell us if the 2 year-long uptrend in equities is over or not. Breakdown below long-term averages will also violate the lower boundary of steady upward trend channels. While the iShares MSCI Emerging Markets index has margin towards the strong support area, the iShares MSCI All Country World Index closed the week at the support level. Unless we see a stability above 70 levels, the ETF can correct towards the next support at 63 levels.
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Due to very positive feedback we got for the last webinar on rectangle chart patterns, we are continuing the webinar series with another reliable horizontal chart pattern; the ascending triangle. Live Webinar and Q&A with Aksel - Thursday, March 8, 11am mountain. You can register here (Register for the Live Webinar)
Equity indices that had weak rebound from the lows, tested the same support areas. Japan's Nikkei Index is one of them. On the weekly scale we can see that the upward trend channel is still intact with the support forming at 20,880 levels. On the daily scale price chart (futures price data to capture Friday's close) we can see that the Friday's recovery on U.S. indices helped the Nikkei Futures to form a Doji candlestick at the support. Failure to hold these levels can result in a larger scale correction. In the short-term Japan's Nikkei will try to find support around 20,880 levels and if it succeeds we will possibly label the price action as a double bottom.
Global equity benchmarks deviated far from the averages that a 10% correction in 2 weeks is still considered a reversion to the mean. With this week's continued sell-off both benchmarks for Global equities, the iShares MSCI All Country World Index ETF and the iShares MSCI Emerging Markets Index ETF reached their respective 200-day (40 week) moving averages. The 200-day moving average and the lower boundary of multi-month long upward trend channels are forming support around the same levels. Read More
2018 started with strong weekly gains. The steady uptrend on the iShares MSCI All Country World Index ETF took a steep shape in January due to back to back long weekly candlesticks. This week's sharp reversal gave back last two week's gains. From a classical charting perspective we don't have enough evidence to call the latest reversal a "market top". Multi month-long uptrend is still intact. We are currently experiencing a reversion back to the averages or to the long-term trend line supports. Global equities can retrace further and major equity benchmarks can still remain in their long-term uptrends. We will need more evidence in the following weeks.
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Reviewing long-term charts usually helps us to be focused on the big picture. Due to day to day volatility we might lose sight of the forest for the trees. Every now and then I feature these long-term charts to check the status of the bull market in global equities. U.S. equities have been a leader in the bull market. S&P 500 Index was one of the first widely followed U.S. equity benchmark that completed the decade-long consolidation and broke out to all-time highs in 2013. Since then the index has been in a steady uptrend reaching new high ground. Taking the width of the decade long-consolidation and adding it to the breakout level in percentage terms, gives us a price target in the range of 3,000-3,150.
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Over the past few months Tech Charts Global Equity Markets report analyzed the Europe's EURO STOXX BANKING INDEX and discussed the possibility of a sideways consolidation that can be identified as a 7 month-long symmetrical triangle. The index remained in a tight range for the past months. 2017 ended with the Euro Stoxx Banking index testing the lower boundary of its multi-month consolidation and the 200-day (40 week) moving average at 129 levels.
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During established up trends pullback to the long-term averages are considered to be low risk entry points. A widely followed trend indicator is the 200 day moving average. Price action above the 200 day moving average is recognized as an uptrend, while price trading below the 200 day (40 week) average is considered to be a downtrend. In the last quarter of 2016, the Euro Stoxx Banking index breached its long-term average on the upside what was considered to be the beginning of a possible uptrend. Since then, each pullback found support at the long-term moving average, confirming the steady uptrend. Over the past 6 months, the Euro Stoxx Banking index formed a sideways consolidation that can be identified as a symmetrical triangle. Read More
After breaking out to all-time highs in the beginning of 2017, UK FTSE 100 Index is still looking for direction as the last several-months price action formed a possible bullish continuation chart pattern. 7 month-long sideways consolidation can be identified as a possible ascending triangle with the lower boundary acting as support at 7,300 and the upper boundary as resistance at 7,600 levels. The upward sloping lower boundary and the horizontal upper boundary gives the chart pattern its bullish bias, suggesting buyers are able to bid the price higher at every pullback. Latest correction not only found support at the lower boundary of the possible ascending triangle but also at the long-term 200 day (40 week) moving average. If the support at 7,300 level holds, we can expect a rebound towards 7,600 levels.
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