• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Tesla Struggles To Compete In European Market

Tesla Struggles To Compete In European Market

Tesla continues to catch the…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

  1. Home
  2. Markets
  3. Other

Central Banks Help Break Downtrend

On Thursday, a G20 representative told Reuters central banks stand ready to assist should the markets deteriorate next week. That central bank news coupled with Wall Street's read that the Greek election will be market-favorable was enough to push numerous markets to important new highs. Flipping through our chart book late today we saw mostly bullish evidence. A few examples are shown below.

Last Saturday, we presented a series of charts similar to the one below. The moving averages finished the current week with positive slopes, which is a good sign for the short-term trend.

SPX

We have shown the pink trendline below for several weeks. The All-World Index ex-U.S. (VEU) closed back above the trendline on Friday, which leans bullish. The slope of the 20-day moving average (blue line) also ticked up in a bullish manner. Notice how the slope of the 20-day can assist in identifying a short-term trend change. All things being equal, if you are looking to buy, you prefer to see a positive slope on the 20-day.

VEU

An inverse head-and-shoulders pattern is a potentially bullish set-up. Many markets, including the S&P 500 and VEU, currently have a form of the pattern. On Friday, VEU pushed above the dotted neckline. The probable target for the move is toward 41.50. Notice a bullish move to that level would still keep the longer-term downtrend in place, which means even if stocks rally further, we need to keep a close eye on things.

VEU

The shorter-term downward-sloping trendline for VEU was recently broken near point A below, which is the first step required for a basic trend change. A higher low was made above point B, followed by a higher high to the right of point C. The higher high made Friday completes a change in trend.

VEU

If time permits, we will try to post a video sometime this weekend expanding on these and other concepts. Anything can happen next week post elections in Greece, but there is no question the last two Fridays have favored the bulls. If we pay attention to price, we will not go too far wrong.

 

Back to homepage

Leave a comment

Leave a comment