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All three indicators on this 5-Year Daily chart of the World Market Index are slightly above their respective zero levels, with price hovering above the 50 moving average. They’ll all need to hold at or above those levels, otherwise a sharp failure would likely spell big problems for U.S. equities.
After today’s (Friday’s) 53.5 point drop on the SPX, volatility has now fallen back into the “Major Conflict Zone,” as depicted on the following 20-Year Monthly ratio chart of SPX:VIX.
Further to my post of August 2nd, and as of today’s (Friday’s) close, the SPX:VIX ratio, has now stepped into unknown territory, while Momentum continues its unparalleled parabolic rise, as shown on the following 20-Year Monthly chart below.
The Momentum indicator on the SPX:VIX ratio is at a new life-time high and it’s going parabolic, as shown on the Monthly chart below.
In my 2016 Market Forecast post of December 29, 2015, I mentioned three ratio charts worth monitoring for 2016.
They show the strength/weakness of the:
The following three updated Daily ratio charts show that U.S. and European financials are weak (and weakening) compared with their respective Major Index, so far, this year, while China’s financials are also weak and mired in a long-term trading range, just above major support.
Even if U.S. equity markets do break out of their long-term high-basing trading range (as described in my last post), none of these three ratio charts fill me with much encouragement to project that such a rally could last very long if we see continued weakness, and, especially, a deterioration in these Financial ETFs compared with their Index.
