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Monday, January 18, 2010

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

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

Here are a Few Charts, Globetrotter Style!

This is an updated version of the post A Trip Around the Globe: A Look at a Few International Indices - Dec 10, 2009


First stop Europe. The DAX, arguably the leader of the European Stock Markets, had its first scary drop in Nov/Dec (labeled as "Yowza"). Since then it began to rally again and put in a higher high. ... Yet ... the sideways breakout of the large diagonal is itself a diagonal. This chart portends (to me at least) a pretty substantial correction soon (probably in the next couple of weeks). I think it could easily market the start of a major downtrend as well, but lets stick with first things first.

Next stop, India! The BSE has had an *impressive* rise off the bottom, but its rally has maintained a distinct wedge shape (other indices have mostly morphed into a rolling top). There was a sharp pullback and then a rebound. And like the DAX above, the breakout of the first wedge is itself a wedge. I think there is a correction in the close future for the Sensex. This is a good one to keep your eye on.

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. Not looking so hot my friends. It is a heavy mix of Asian/Chinese stocks and Financials. And financials are far from healthy at the moment. It looks like a large ending diagonal. There was a breakdown, move up to the lower channel line and another breakdown. Then *another failed trendline retest (which didn't even come close to recapturing the broken trendline)*. I think this chart is saying "lots of trouble ahead". This is probably one of the most imminently bearish charts I have seen yet for a major index.

Next is South Korea. It is coming up on major resistance. I tried once and was tossed back hard. But now the pattern is turning bullish again. What was a down channel is now looking like a bullish flag with a break out above. It pushed through the lower resistance zone and is now consolidating. So here is the question: does it break through and try for the upper resistance zone? or does it turn down here making a double top? The indicators are suggesting bearishness, but not overly so. I don't have a super strong opinion on this chart.

China / via the Shanghai exchange. Read the notes, they tell the story.

Next Tokyo. I have written Several posts on the NIKKEI.

NIKKel, I Deserve at Least $0.06 For This Analysis last week, If I had a NIKKel for ....) Nov 29, where I identified the potential H&S setup, and Long Term Count of NIKKEI back in Sept... Yet that H&S setup turned out to be bogus. Ahhh well, just part of the game. The current move was a strong breakout but the momentum is severely slowing. Looks ready for a small correction. Beyond that there are no clear indications.

Next stop, South America! The Brazilian BVSP is putting on an *impressive* run!! Holy Cow! Will it make a new all time high? I think the odds are definitely on its side. But look at the weekly chart, the momentum is definitely not on the BVSP's side. I think there will be a correction of some magnitude (too early to tell the size) before it puts in a new all-time high. Which I still put very good odds on. The recent move is much too strong to ignore.

Back to the USA. Looking at the weekly chart of the SPX, two words come to mind: tired and weak. Lots of negative divergence on the indicators, especially the money flow. And the top of this rally is looking very rounded indeed. Since my last post in December the size and quality of the rally has been pretty weak. This chart does NOT look bullish.

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