Saturday 29 September 2018

Weekend update - World equity markets

It was a very mixed month for world equity markets, with net monthly changes ranging from +9.1% (Russia), +5.5% (Japan), +3.5% (China, Brazil), +1.9% (USA), +1.6% (France), -0.1% (Spain), -0.9% (Germany), -1.6% (Australia), to -5.2% (Greece).

Lets take our regular look at ten of the world equity markets

USA - Dow

The mighty Dow climbed for a third consecutive month, the 5th month of 6, settling +493pts (1.9%) to 26458, having broken a new historic high of 26769. Note the key 10MA at 25068, which is near m/t rising trend from the Feb'2016 low. Underlying macd (green bar histogram) cycle ticked higher for a third month.

The Dow notably broke above the 2.618x Fibonacci extension/extrapolation of 26702. The next key fib' is 34430, 7972pts (30.1%) to the upside, and that is clearly going to take a good 12-18mths to reach.

The equity bears have nothing to tout unless a monthly close under the 10MA and m/t rising trend, which are both rising around 210/220pts a month. By year end, core support will be around 25700/800. 

Germany – DAX

The economic powerhouse of the EU - Germany, saw a very mixed month. The DAX saw weakness to 11865, but rebounded to settle -0.9% at 12246. The bounce from l/t trend is perhaps the most noteworthy event in world equities this month. Clearly though, price action remains pretty choppy, and still leaning on the weaker side. The German bulls need a monthly close back above the 10MA, currently at 12557. To be decisive, the bulls need a push >13k, which would offer 15/16k by mid 2019.

Japan – Nikkei

The Japanese market climbed for a 4th month, settling +1264pts (5.5%) to 24120, the highest monthly close since Oct'1991. The m/t outlook is bullish, with soft target of 26k, then psy'30k, and ultimately.. the Jan'1990 historic high of 38915.

China – Shanghai comp'

It was a mixed month for Chinese equities, with the Shanghai comp' breaking a multi-year low of 2644, just 6pts above the Jan/Feb'2016 low. There was a distinct rebound into end month, settling +96pts (3.5%) to 2821. Note the 10MA at 3065. A monthly close >3100 will be provisionally bullish. Things turn decisive >3500.

Brazil – Bovespa

The Brazilian market remains pretty choppy, seeing a low of 74274, but settling +2664pts (3.5%) to 79342. The m/t outlook is mixed. Things turn rather bullish >81k, and decisively >88317.

Russia - RTSI

Russian equities swung from a low of 1040, to settle +99pts (9.1%) to 1192. The 1200 threshold remains important. If that can broken and held above, then its open air to at least 1500. Higher oil and nat' gas prices would especially help this market.

France – CAC

The French market remains broadly choppy since Oct'2017, with the CAC settling +86pts (1.6%) to 5443. Things turn very bullish above the May high of 5657.

Spain – IBEX

The Spanish market remains broadly choppy, still leaning on the weaker side. The IBEX settled -10pts (0.1%) to 9389. Things only turn bullish with a break above declining trend, which will be around the psy' 10k threshold in October.

Australia – AORD

Australian equities saw the first net monthly decline since March, with the AORD -102pts (1.6%) to 6325. However, note the spike floor from the 10MA, which leans to renewed upside in October/Q4. Some strength in commodity prices would really help this market into year end.

Greece - Athex

The economic basket-case of the EU -  Greece, saw the Athex fall for the 5th month of 8, settling -37pts (5.2%) to 691, the lowest monthly settlement since March 2017. Its notable that the Athex is -87.1% from the Nov'2007 high. An eventual exit from the Euro remains highly probable, along with a huge sovereign debt write off.


Five world markets were net higher, with five net lower.

The US and Japan are leading the way higher, whilst Australia and Greece are lagging.

The German and Chinese markets are offering key m/t floors/turns. If that is the case, it bodes very well for most other world markets into year end, and arguably... across much of 2019.

Looking ahead

M - PMI/ISM manu', construction
T - Vehicle sales, Powell speaking in Boston
W - ADP jobs, PMI/ISM serv', EIA Pet' report
T - Weekly jobs, factory orders
F - Monthly jobs, intl' trade, consumer credit (3pm)

If you value my work, subscribe to me.
For details:

Have a good weekend

*the next post on this page will likely appear 6pm EDT on Monday.