I hope Slopers had a good Thanksgiving. It went relatively decent here, but I’m glad it’s over. Back to normal life for a little while (shortened trading session Friday notwithstanding).
One remark I’ve got to make is that I think the Japanese Yen’s collapse is overdone for now. Ever since the election, the US dollar has been rocketing against the Yen. I think this long-term trend will persist, but for now, I think there’s going to be some reversion to the mean. I’ll probably go ahead and take the plunge by going long the Yen on Friday. (I’m typing this on Thursday night)
As can be seen on the following Daily chart of the World Market Index, price has fallen below both the 50 and 200 MAs and is, once again, nearing a critical major support level of 1600.
Even though price is trading under the bullish influences of a moving average Golden Cross, all three technical indicators are hinting of further weakness to come.
Watch for a bullish cross-over of the MACD and PMO indicators, as well as a price reversal and bounce, break and hold, firstly, above 1700, then above 1750, as a potential signal of clear support of higher prices for world equities, in the longer term, including that of the SPX. Conversely, a break and hold below 1600 could very well forecast a large downdraft for all world equities in the near term.