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Weekly Top Down View of the Markets – 4/3/2017

General Market Analysis

Weekly Top Down View of the Markets – 4/3/2017

World markets have been a bit quiet over the past few weeks having put in a short series of tight weekly candles in subdued consolidation while hanging around all-time highs.

The Dow Jones World Stock Index is hovering just under the 350 level having smacked up against upper channel resistance. Major support at 340 may keep world markets in limbo for a bit longer before a decisive catalyst gives impetus to one or the other warring faction. A break below 340 support would open up a further downside target of 330 and a rising 50 period EMA, however this would most likely serve as a buying opportunity as such a pull back would not result in excessive technical damage.

Dow Jones World Index – Weekly

 

Broader View

 

The FTSE appears to be taking a brief breather for now. Having broken out to all-time highs at the beginning of the year, it is in the process of pulling back to a rising 20 EMA and the 7,100 level. These two potential support areas together, during a period of rising prices is usually enough to bring the buyers back in once prices fall to meet them. A break out back above 7,400 on a closing basis would signal a resumption of upward progress and be a great opportunity to re-commit capital if that should happen.

FTSE 100 Index – Weekly

 

Broader View

 

The beautiful ascending wedge that was forming on the Nikkei failed to the downside and is now testing a flattened 20 EMA. However, it is possible that this support may hold and serve as a buying opportunity. A close back above the initial failed upside breakout would confirm this whereas a breakdown below the 20 EMA would open up the 18,000 level and even further down the rising 200 EMA and trendline support.

Nikkei 225 Index – Weekly

 

Broader View

 

The Shanghai Composite Index continues to compress into a tighter and tighter low volatility triangle. A break out in either direction may lead to a significant period of trending prices.

Shanghai Composite Index – Weekly

 

Broader view

 

The DAXX seems to be in the process of forming a classic cup and a handle pattern. The cup portion of the pattern seems to be complete but it is possible for price to break out to new highs from here and not form a handle. However, with other world indexes appearing stretched to the upside the odds of a handle forming before a potential breakout are high.

DAXX Index – Weekly

Broader View

 

All four of the major US indexes have pulled back to support in varying degrees over the past few weeks. The Nasdaq has shown relative strength with a bounce back after a spate of selling two weeks ago. But further consolidation in all four indexes is a distinct possibility as the market awaits further impetus for the next move either higher or lower.

NASDAQ

 

DOW JONES

 

S&P 500

 

RUSSELL 2000

 

 

 

 

 

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