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Sunday, May 2, 2010

A Trip Around the Globe IV: A Look at a Few International Indices

I see London I see France .... :)

Here are a Few Charts, Globetrotter Style!

Original - A Trip Around the Globe: A Look at a Few International Indices - Dec 10, 2009
Second Trip - A Trip Around the Globe II: A Look at a Few International Indices - Jan 18, 2010
Third Trip - A Trip Around the Globe III: A Look at a Few International Indices - Jan 31, 2010


First things first

Per usual binve modus operandi, I made some horrendously bad calls in my last trip. Namely, I thought that the January top marked a significant top, which the market resoundingly threw back in my face.

However, when I look at the international markets now, 3 months later, something very interesting is occurring. Namely, the last year was market by virtually every index on the planet (not exactly, but a lot of the major ones) moved basically in lock-step. But over the last 3 months we have been seeing more and more divergences develop.

The SSEC (china) and the HSI (asia + international financials) are putting on a dismal performance. Whereas indices like the NDX are still going very strong. Divergences are very interesting and might be giving us a clue as to what is happening next.

First stop Europe. The DAX, arguably the leader of the European Stock Markets, shrugged off the negative developments in January and made some clear new highs. It is also challenging its 62% retrace right now (just like the Dow and SPX). It is still not forecasting major weakness and looks to be holding its own (and with the worries about Greece, Spain and Portugal in the Euro-zone, the stronger European economies will act like safe havens relatively speaking).

The FTSE (Great Britain) on the other hand, does not. This was one of the few good calls I made recently: Bob's Your Uncle

Next stop, India! The Sensex did not break down as much as I thought it would (it did test the 200 day MA like I expected, but I held firm, which I didn't expect). But now it is just retesting the highs in a sort of sideways action. It also did not use the support line off the bottom to make a new run up. That could be very telling.

Next stop, the Far East! I have spent a lot of time writing about Asian Markets, please look through my posts for more observations: Asia

First look is at the HSI. Still not looking so hot my friends. It was the weakest link in my last post and it still looks anemic. It is a heavy mix of Asian/Chinese stocks and International financials. Financials have been faring slightly better recently (US domestic financials were on a tear the last 2 months). The HSI has two crotches and it is getting kicked in one of this time (it's cup is half on?).

Next is South Korea. It is coming up on major resistance. It tried once and was tossed back hard. But like the Energizer Bunny, it kept going. Right now it is at a crossroads. It is in the stance of making a triple top. But if it does breakout, it has a *huge* resistance zone above which should prove difficult to break through.

China / via the Shanghai exchange. Read the notes, they tell the story. The only thing I will add here is: yikes. It keeps breaking support and the momentum is starting to change to downward again.

Next Tokyo. I have written Several posts on the NIKKEI. We did get a small drop from where I called it, but nothing like what I was expecting. However this move back up the last 3 months is very tired, not at all sharply up. It could be a large ending diagonal in the making. This is one I am watching closely.

It also is worthwhile to keep in perspective that the NIKKEI is still in the midst of a several decade bear market

Next stop, South America! The Brazilian BVSP is putting on an *impressive* run!! However, the weekly indicators are looking tired. It did put in a new nominal high during the last 3 months but not an all time high. And the weekly chart is still saying that there will likely be a pullback (of some significance) before the next major bull move.

Back to the USA.. First is the NDX (Nasdaq 100)... holy schnikeys. This sucker just keeps going. It did break the 78.6% retrace (most impressive). The NDX does have a history of very deep wave 2 retraces, but this is ridiculous. There is one last resistance zone within the context of a P1 retrace. If it moves through it on any kind of strength, then I would highly doubt the P2 count for NDX, and call the Cycle Degree X more likely (which I am tempted to do right now). And if the NDX is in a Cycle X, then are the rest of the indicies also in a Cycle X, as I layed out the possibility for here? Examination of the Large Technical Landscape / Possible Paths. Could be, but one step at a time:

For a more sober comparison, look at the SPX. It did break previous resistance and is now testing the 62% retrace. But it is doing so on negative divergence and weakening internals.

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